This study investigates the relationship between board gender diversity and firm performance in Japan, analyzing 1990 publicly listed Japanese companies from 2006 to 2023. Using a fixed-effects regression model, the findings reveal a significant negative impact of board gender diversity on firm performance. This adverse correlation is more pronounced in smaller firms, those with higher leverage, lower institutional ownership, and regulated or consumer-focused industries, particularly pre-COVID-19. The negative effect is transmitted through corporate social responsibility and firm innovation rather than board independence or CEO duality. A two-stage least squares (2SLS) model, using an equal opportunity policy as an instrumental variable, confirms these findings. The robustness of the results is further supported by substituting return on equity for return on assets as a performance indicator. The study does not find a U-shaped nonlinear relationship between board gender diversity and corporate performance. The analysis shows that board gender diversity negatively affects firm performance, particularly in smaller firms and those with higher leverage. The mediating effects are more significant through environmental, social, and governance (ESG) factors than through research and development (R&D). The study contributes to the literature on corporate governance in Japan, highlighting the need for further research on the impact of gender diversity on firm performance in Japan.This study investigates the relationship between board gender diversity and firm performance in Japan, analyzing 1990 publicly listed Japanese companies from 2006 to 2023. Using a fixed-effects regression model, the findings reveal a significant negative impact of board gender diversity on firm performance. This adverse correlation is more pronounced in smaller firms, those with higher leverage, lower institutional ownership, and regulated or consumer-focused industries, particularly pre-COVID-19. The negative effect is transmitted through corporate social responsibility and firm innovation rather than board independence or CEO duality. A two-stage least squares (2SLS) model, using an equal opportunity policy as an instrumental variable, confirms these findings. The robustness of the results is further supported by substituting return on equity for return on assets as a performance indicator. The study does not find a U-shaped nonlinear relationship between board gender diversity and corporate performance. The analysis shows that board gender diversity negatively affects firm performance, particularly in smaller firms and those with higher leverage. The mediating effects are more significant through environmental, social, and governance (ESG) factors than through research and development (R&D). The study contributes to the literature on corporate governance in Japan, highlighting the need for further research on the impact of gender diversity on firm performance in Japan.