Does Board Internationalization Increase Idiosyncratic Risk?

This study examines the impact of board internationalization on corporate idiosyncratic risk and assesses whether Environmental, Social, and Governance (ESG) performance moderates this relationship. Using a panel dataset of Chinese A-share listed firms from 2010 to 2023, we find that a higher proportion of directors with foreign experience is associated with increased firm-specific risk. This association appears less pronounced in firms with stronger ESG performance, particularly in the governance dimension. The findings contribute to the broader understanding of how board composition and sustainability practices relate to firm-level risk.