The Impact of Corporate Governance and Sustainability Incentives on ESG Performance: An Analysis of E‐Commerce Companies

ABSTRACT This study examines the impact of corporate governance structures and sustainability incentives on environmental, social, and governance (ESG) performance in e‐commerce companies and further analyzes the moderating role of board gender diversity in this relationship. Panel data from 193 US firms listed on NASDAQ and NYSE during the period 2019–2024 are employed, with fixed‐effect estimations supported by two‐step System Generalized Method of Moments (System GMM) to ensure robustness. The findings reveal that board gender diversity and independent directors significantly enhance ESG performance, whereas CEO–chairman duality undermines it, consistent with agency theory. Board size shows no significant effects, while the annual frequency of board meetings has a significant negative impact on ESG performance, underscoring the importance of governance quality over quantity. Moreover, the presence of CSR committees is found to contribute positively to ESG performance, particularly in the environmental, social, and governance dimensions. Conversely, sustainability‐linked compensation incentives are found to significantly contribute to ESG performance; however, these impacts are not evident in the environmental, social, and governance dimensions. Lastly, we found that the joint effect of board gender diversification and sustainability‐linked compensation incentives decreases the ESG performance; however, this effect also vanishes with robustness analysis. Overall, the results highlight critical governance mechanisms that can strengthen ESG outcomes in e‐commerce companies, providing valuable implications for enhancing corporate sustainability in this rapidly evolving sector.