ABSTRACT This study addresses a core puzzle in governance and sustainability research, namely, why the effects of board gender diversity (BGD) on environmental outcomes remain inconsistent. We develop the concept of a conversion gap, the distance between sustainability rhetoric and outcomes that capital markets and regulators treat as financially material, and we operationalize conversion using firms' green‐revenue share. Using 9437 firm‐year observations from the United States, China, and India from 2012 to 2023, we estimate panel models with year and industry fixed effects, firm‐clustered inference, and a firm fixed‐effects specification. BGD is positively associated with green revenue on average, and this association is stronger among firms with higher Transition Pathway Initiative (TPI) management quality. The BGD–green‐revenue relation also varies across national settings, consistent with institutional differences shaping the conversion of board‐level intent into commercialization outcomes. Overall, the findings reposition governance effectiveness around substantive, market‐facing outcomes and highlight complementarity between board composition and credible transition governance in closing the conversion gap.
Hussain et al. (Thu,) studied this question.