Do board characteristics affect financial sustainability? The COVID-19 pandemic experience

Abstract

Purpose This study aims to analyze the board characteristics–financial sustainability relationship in the largest US nonfinancial listed firms and the impact of the COVID-19 pandemic on this relationship. Design/methodology/approach Board characteristics such as attendance, cultural diversity, size, experience and gender diversity were assessed in relation to financial sustainability through various regression models, using 2007–2023 panel data of nonfinancial S&P 500 firms. Findings The examined board characteristics are positively associated with financial sustainability. The COVID-19 pandemic accentuated this association, which emphasizes the importance of effective board oversight during crises. Practical implications The findings provide guidance to shareholders, managers and regulators seeking to enhance corporate governance and financial sustainability. The adoption of effective supervisory and monitoring mechanisms can improve financial sustainability and reporting practices. Social implications Enhanced financial sustainability practices can lead to a more stable and secure financial future for companies, thus benefiting employees, shareholders and communities. This study offers insights for promoting the overall social and economic well-being of the US market. Originality/value This study enhances knowledge on how board characteristics influence financial sustainability, particularly during crises such as the COVID-19 pandemic. It provides insights into safeguarding stakeholder interests and improving financial sustainability in the US market.