Board effectiveness as a governance mechanism in the green finance—Sustainable firm performance nexus: Evidence from listed companies

Abstract

This research aims to analyze the relationship between green finance strategy, board effectiveness, and sustainable firm performance of the listed companies in India, with a special focus on the moderating effect of board effectiveness. A cross-sectional design method by using structured questionnaire with a five-point Likert scale as the instrument for data collection, and 300 respondents were selected from 55 listed companies in the country using purposive sampling, providing novel evidence by incorporating green finance, green governance, and green sustainable performance in the context of an emerging market (Al-Kubaisi & Khalaf, 2023; Intezar et al., 2026). Descriptive statistics, Pearson correlation, ordinary least squares (OLS) regression, and moderated regression with HC3 robust standard errors were used for the analysis. Results indicate that the variable of green finance strategy has a positive influence on the variable of sustainable firm performance and the variable of board effectiveness has a positive influence on the variable of sustainable firm performance, and also between the variable of green finance strategy and the variable of board effectiveness have a positive influence. But the green finance strategy-board effectiveness interaction is statistically significant and negative, suggesting that the green finance-performance relationship might be dampened instead of magnified by more effective boards.