This study examines how board gender and ethnic diversity shape ESG performance, and whether functional expertise diversity and board member affiliations condition that relationship. Using a cross-sectional sample of 217 NYSE-listed industrial firms and hand-collected data on approximately 1,785 directors, the analysis combines Refinitiv ESG scores with detailed board-level data. Direct effects were tested via hierarchical OLS, moderation via PROCESS macro, and critical mass via binary indicators at the 30% threshold. The results show that gender diversity is positively and significantly associated with ESG performance, while ethnic diversity exhibits only a marginal direct effect. Both relationships, however, intensify once representation crosses critical mass, indicating that demographic diversity requires a sufficient level of representation before its influence on ESG becomes substantial. Functional expertise diversity does not condition either relationship, whereas board affiliations weaken the contribution of ethnic diversity to ESG as directors' external commitments accumulate, a pattern consistent with the busyness hypothesis. By integrating demographic diversity, critical mass, and moderating board attributes within a single conditional framework, this study offers new evidence on when, and under what circumstances, boardroom diversity translates into stronger sustainability performance in the industrial sector.

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