The Effect of Communication with Those Charged with Governance on ESG Performance, Focusing on Female Directors on The Board

Abstract

This study examines the relationship between communication with those charged with governance and ESG performance. Communication with those charged with governance, which refers to formal interactions between external auditors and governance structures, has become increasingly significant in recent years due to heightened regulatory expectations. This trend is driven by regulatory efforts to strengthen disclosure requirements, aiming to enhance accounting transparency. Using data from Korean firms (2019-2020), the empirical results show that more frequent communication with those charged with governance improves ESG performance. Such interactions promote internal governance effectiveness, which in turn supports long-term sustainability. In addition, the presence of female board directors strengthens the positive relationship between governance communication and ESG outcomes, emphasizing the value of board diversity.