This study contributes to the work on board composition and firm corporate social responsibility by extending it to the environmental domain. It evaluates the relationship between boards of directors’ composition and environmental corporate social responsibility by integrating literatures on board composition, firm corporate social responsibility, and individual differences in attitudes toward and information about environmental issues. Using disclosed company data and the natural environment ratings data from Kinder Lydenberg Domini Inc. for 78 Fortune 1000 companies, the study finds that a (...) higher proportion of outside board directors is associated with more favorable ECSR and higher KLD strengths scores. Firms with boards composed of three or more female directors received higher KLD strengths scores. And, boards whose directors average closer to 56 years in age and those with a higher proportion of Western European directors are more likely to implement environmental governance structures or processes. Our results also reinforce growing concerns around unidimensional KLD measures. (shrink)

There is a distinct lack of research into the relationship between corporate governance and corporate social responsibility (CSR) in the banking sector. This paper fills the gap in the literature by examining the impact of corporate governance, with particular reference to the role of board of directors, on the quality of CSR disclosure in US listed banks’ annual reports after the US sub-prime mortgage crisis. Using a sample of large US commercial banks for the period 2009–2011 and controlling for audit (...) committee characteristics, board meeting frequency, and banks’ profitability, size and risk, we find evidence that board independence and board size, the two board characteristics usually associated with the protection of shareholder interests, are positively related to CSR disclosure. This indicates that, with regard to CSR disclosure, more independent boards of directors and larger boards are the internal corporate governance mechanisms which promote both shareholders’ and other stakeholders’ interests. Contrary to our expectations, CEO duality also impacts positively on CSR disclosure. From an agency-theoretical viewpoint, this suggests that powerful CEOs may promote transparency about banks’ CSR activities for their private benefits. While this could indicate that powerful CEOs are under particular pressure to appease stakeholders’ concerns that they might abuse their power by providing a high degree of CSR disclosure, it could also be a sign of managerial risk aversion or managers’ private reputational concerns. (shrink)

This study investigates how board size and occupational background of directors differentially influence social performance in for-profit and non-profit organizations. Using data from California hospitals, we develop a quantitative measure of social performance and provide the following empirical evidence. First, board size is negatively (positively) associated with social performance in for-profit (non-profit) hospitals. Second, the presence of government officials on the board is negatively (positively) related to social performance in for-profit (non-profit) hospitals. Third, representation of physicians on the board is (...) positively associated with social performance in for-profit hospitals, whereas their presence is not significantly related to social performance in non-profit hospitals. Our findings highlight the different effects of governance mechanisms on social performance in for-profit and non-profit organizations. (shrink)

This paper investigates the impact of diversity on corporate philanthropy. Compared to previous studies that have considered the influence of board diversity and CEO gender on corporate philanthropy, this study introduces the concept of operational diversity, which is the implementation of diversity programs at management, employee, and supply chain levels, and further, it explains why operational diversity influences corporate philanthropy, by using the premises of resource dependence theory. Second, this study also investigates the influence of board diversity on corporate philanthropy. (...) Third, this study uses a large sample of U.S. firms over the period of 1991–2009 and tries to mitigate possible omitted variables and endogeneity problems that are often overlooked in previous research. We demonstrate that firms with operational diversity programs are likely more dependent on a broad variety of resources and give more to community as a strategic maneuver; hence, operational diversity is a better indicator for predicting future corporate giving than board diversity alone. However, having a woman or a member of a minority as a company’s chief executive officer is not sufficient to impact its charitable giving. A battery of robustness tests support our conclusion and confirm that our results are not driven by a firm’s general corporate social responsibility (CSR) score, gender or independence of board members, or firm ownership. This paper will assist researchers, practitioners, and other stakeholders in deepening their understanding of the predictors of corporate giving. (shrink)

In this article, we examine the empirical association between corporate governance (CG) and corporate social responsibility (CSR) engagement by investigating their causal effects. Employing a large and extensive US sample, we first find that while the lag of CSR does not affect CG variables, the lag of CG variables positively affects firms’ CSR engagement, after controlling for various firm characteristics. In addition, to examine the relative importance of stakeholder theory and agency theory regarding the associations among CSR, CG, and corporate (...) financial performance (CFP), we also examine the relation between CSR and CFP. After correcting for endogeneity bias, our results show that CSR engagement positively influences CFP, supporting the conflict-resolution hypothesis based on stakeholder theory, but not the CSR overinvestment argument based on agency theory. Furthermore, firms’ CSR engagement with the community, environment, diversity, and employees plays a significantly positive role in enhancing CFP. (shrink)

This study examined the relationship between the proportion of women serving on firms' boards of directors and the extent to which these same firms engaged in charitable giving activities. Using a sample of 185 Fortune 500 firms for the 1991-1994 time period, the results provide strong support for the notion that firms having a higher proportion of women serving on their boards do engage in charitable giving to a greater extent than firms having a lower proportion of women serving on (...) their boards. Further, the results suggest a link between the percentage of women on boards and firm philanthropy in the areas of community service and the arts, but found no link between women boardmembers and firm giving to support education or public policy issues. The implications of the findings and some areas for future research are discussed. (shrink)

Using agency theory, this study empirically examined the relationship between board composition and corporate philanthropy. Generally, the ratio of insiders to outsiders, the percentage of insider stock ownership, and the proportion of female and minority board members were found to be positively and significantly associated with firms'' charitable contributions.

Wider diversity in board member characteristics has been advocated as a means of improving organizational performance by providing boards with new insights and perspectives. With data from 240 YMCA organizations, a board diversity index was constructed and compared to multiple measures of board member diversity. Results revealed higher levels of social performance and fundraising results when board members had greater occupational diversity. Gender diversity compared favorably to the organization's level of social performance but a negative association surfaced for level of (...) funds raised. The diversity in board member age groupings was linked to higher levels of donations. (shrink)

One area of business performance of particular interest to both scholars and practitioners is corporate social responsibility. The notion that organizations should be attentive to the needs of constituents other than shareholders has been investigated and vigorously debated for over two decades. This has provoked an especially rich and diverse literature investigating the relationship between business and society. As a result, researchers have urged the study of the profiles and backgrounds of corporate upper echelons in order to better understand this (...) relationship.There is ample evidence that corporations have in recent years increased the proportion of outside directors on their boards. This has been partly in reaction to increased interest in the corporate social responsiveness of business organizations and suggestions that the board of directors could play a unique role in this area. The expectation on the part of practitioners, researchers, and governmental regulators is that outside directors will advocate greater corporate responsiveness to society''s needs by playing a more active role in overseeing managerial decisions. (shrink)

We examine the relationship between corporate governance and the extent of corporate social responsibility (CSR) disclosures in the annual reports of Bangladeshi companies. A legitimacy theory framework is adopted to understand the extent to which corporate governance characteristics, such as managerial ownership, public ownership, foreign ownership, board independence, CEO duality and presence of audit committee influence organisational response to various stakeholder groups. Our results suggest that although CSR disclosures generally have a negative association with managerial ownership, such relationship becomes significant (...) and positive for export-oriented industries. We also find public ownership, foreign ownership, board independence and presence of audit committee to have positive significant impacts on CSR disclosures. However, we fail to find any significant impact of CEO duality. Thus, our results suggest that pressures exerted by external stakeholder groups and corporate governance mechanisms involving independent outsiders may allay some concerns relating to family influence on CSR disclosure practices. Overall, our study implies that corporate governance attributes play a vital role in ensuring organisational legitimacy through CSR disclosures. The findings of our study should be of interest to regulators and policy makers in countries which share similar corporate ownership and regulatory structures. (shrink)

This study examines whether and how female board directors may affect corporate social performance (CSP) by drawing on social role theory and feminist ethics literature. The empirical analysis, based on a sample of 126 firms drawn from the S&P500 group of companies over a 5-year period, suggests that board gender diversity (BGD) significantly affects CSP. However, this impact depends on the social performance metric under investigation. In particular, more gender diverse boards exert stronger influence on CSP metrics focusing on ‘negative’ (...) business practices, such as the ‘concerns’ dimension of the Kinder Lydenberg Domini, Inc. (KLD) ratings. This is because such CSP ratings have the potential to induce higher levels of ‘empathic caring’, which strongly appeals to female directors. Hence, this study reveals further hidden connections in the BGD–CSP link which have important implications for managers, nongovernmental organisations and socially responsible investors. (shrink)

This article explores how the diversity of board resources and the number of women on boards affect firms' corporate social responsibility (CSR) ratings, and how, in turn, CSR influences corporate reputation. In addition, this article examines whether CSR ratings mediate the relationships among board resource diversity, gender composition, and corporate reputation. The OLS regression results using lagged data for independent and control variables were statistically significant for the gender composition hypotheses, but not for the resource diversitybased hypotheses. CSR ratings had (...) a positive impact on reputation and mediated the relationship between the number of women on the board and corporate reputation. (shrink)

This article addresses four hypotheses: (a) that corporate social responsibility (CSR) in Asia is not homogeneous but varies among countries, (b) that the variation is explained by stages of development, (c) that globalization enhances the adoption of CSR in Asia, and (d) that national business systems structure the profile of multinational corporations’ CSR. These hypotheses are investigated through analysis of Web site reporting of 50 companies in seven Asian countries: India, Indonesia, Malaysia, the Philippines, South Korea, Singapore, and Thailand. The (...) article concludes that CSR does vary considerably among Asian countries but that this variation is not explained by development but by factors in the respective national business systems. It also concludes that multinational companies are more likely to adopt CSR than those operating solely in their home country but that the profile of their CSR tends to reflect the profile of the country of operation rather than the country of origin. (shrink)

In this paper, we seek to answer two questions: (1) what does boardroom diversity stand for in the strategic management literature? And, (2) is there a significant relationship between boardroom diversity and corporate social performance. We first clarify the boardroom diversity concept, distinguishing between a structural diversity of boards and a demographic diversity in boards, and then we investigate its possible linkage to social performance in a sample of S&P500 firms. We find a significant relationship between diversity in boards and (...) social performance. This relationship is moderated by diversity of boards. Our results also reveal the effects of the specific variables that make up the diversity of boards and diversity in boards constructs. In particular, gender, and age have a significant effect on corporate social performance. Some important measurement issues are raised and discussed. (shrink)

Relatively little research has examined the effects of ownership on the firms’ corporate social responsibility (CSR). In addition, most of it has been conducted in the Western context such as the U.S. and Europe. Using a sample of 118 large Korean firms, we hypothesize that different types of shareholders will have distinct motivations toward the firm’s CSR engagement. We break down ownership into different groups of shareholders: institutional, managerial, and foreign ownerships. Results indicate a significant, positive relationship between CSR ratings (...) and ownership by institutions and foreign investors. In contrast, shareholding by top managers is negatively associated with firm’s CSR rating while outside director ownership is not significant. We conclude that different owners have differential impacts on the firm’s CSR engagement. (shrink)

Although corporate decision makers may justify charitable contributions on strategic grounds, extremely large corporate philanthropic contributions may beperceived by shareholders as unnecessary. If stockholders attempt to limit corporate philanthropy, then governance mechanisms should put a cap on giving amounts. Using a matched-paired sample to control for industry and company size, theauthors compared big givers and small givers. The authors find that blockholders and institutional owners limit corporate philanthropy. This suggests that high levels of corporate philanthropy may be perceived as excessive (...) by influentialstockholders, and some governance mechanisms act to curtail it. (shrink)

Although the composition of the board of directors has important implications for different aspects of firm performance, prior studies tend to focus on financial performance. The effects of board composition on corporate social responsibility (CSR) performance remain an under-researched area, particularly in the period following the enactment of the Sarbanes-Oxley Act of 2002 (SOX). This article specifically examines two important aspects of board composition (i.e., the presence of outside directors and the presence of women directors) and their relationship with CSR (...) performance in the Post-SOX era. With data covering over 500 of the largest companies listed on the U.S. stock exchanges and spanning 64 different industries, we find empirical evidence showing that greater presence of outside and women directors is linked to better CSR performance within a firm’s industry. Treating CSR performance as the reflection of a firm’s moral legitimacy, our study suggests that deliberate structuring of corporate boards may be an effective approach to enhance a firm’s moral legitimacy. (shrink)

This article addresses four hypotheses: (a) that corporate social responsibility (CSR) in Asia is not homogeneous but varies among countries, (b) that the variation is explained by stages of development, (c) that globalization enhances the adoption of CSR in Asia, and (d) that national business systems structure the profile of multinational corporations’ CSR. These hypotheses are investigated through analysis of Web site reporting of 50 companies in seven Asian countries: India, Indonesia, Malaysia, the Philippines, South Korea, Singapore, and Thailand. The (...) article concludes that CSR does vary considerably among Asian countries but that this variation is not explained by development but by factors in the respective national business systems. It also concludes that multinational companies are more likely to adopt CSR than those operating solely in their home country but that the profile of their CSR tends to reflect the profile of the country of operation rather than the country of origin. (shrink)

We propose that corporate directors are important in helping organizations deal with two major issues of stakeholders. First, directors can help manage the interests of organizational stakeholders, and second, they assist in protecting the interests of their organizations as stakeholders in society. Their contribution can be conceptualized as the directors’ roles in corporate social responsibility (DR-CSR). We identify two types of DR-CSR, organization-centered and society-centered roles. Based on a study of 120 corporate directors, we observe that the more concern that (...) corporate directors have for stakeholders, the more likely that they will perceive the need to perform their DR-CSR effectively. (shrink)

Based on a survey of 2,361 directors in 291 of the largest companies of the Southeast States, this study empirically examined boards of directors' stakeholder orientations. The results indicate that there exist distinct stakeholder groups perceived by directors, directors have high stakeholder orientations, directors view some stakeholders differently depending on their occupation and type.

Although previous studies focus on the role of women in the boardroom and corporate response to natural disasters, none evaluate how women directors influence corporate philanthropic disaster response (CPDR). This study collects data on the philanthropic responses of privately owned Chinese firms to the Wenchuan earthquake of May 12, 2008, and the Yushu earthquake of April 14, 2010. We find that when at least three women serve on a board of directors (BOD), their companies’ responses to natural disasters are more (...) significant. Age diversity among women on BODs as well as good corporate profitability (e.g., high earnings per share) positively moderates the relationship between women on BODs and CPDR. (shrink)

In this article, we examine the link between board composition and an enterprise strategy outcome, stakeholder relations. Because a firm’s enterprise strategy is set at the highest level of the organization, we expect the presence of stakeholder directors (suppliers, customers, employees, and community representatives) to be positively associated with stakeholder performance.Results from an analysis of 3,268 board members representing 250 firms are discussed in the context of both corporate governance and stakeholder management literatures.

While it is widely assumed that greater diversity in corporate governance will enhance a firm’s corporate social performance, this study considers an alternative thesis which relates managerial control to corporate philanthropy. The study empirically evaluates both board diversity and managerial control of the board as possible predictors of corporate philanthropy. The demonstration of a positive relationship between managerial control and corporate philanthropy contributes to our understanding that corporate social performance results from a complex set of economic and social motives. Possible (...) future research and managerial implications are discussed. (shrink)

The comparison of corporate social performance with corporate financial performance has been a popular field of study over the past 25 years. The results, while broadly conclusive of a positive relationship, are not entirely consistent. In addition, most of the previous studies have concentrated on large-scale cross-industry studies and often with a single variable for corporate social performance, in order to produce statistically significant results. This weakens the richness of understanding that might be obtained from a single industry study with (...) multiple social variables, which would also allow investigation of inter-relationships between individual and sub-sets of social performance measures and between individual and sub-sets of social performance and financial performance measures. There have also been criticisms that the results lack a rigorous theoretical basis, and the paper demonstrates clearly how stakeholder theory must form the basis for this area of research. Following a review of the literature this paper presents the initial findings from a study of the U.K. Supermarket industry which suggest that contemporaneous social and financial performance are negatively related, while prior-period financial performance is positively related with subsequent social performance. Positive relationships between both age and size of the company with social performance are also found. (shrink)

Differences and similarities between inside and outside board members with regard to their attitudes toward corporate social responsibility are examined. The results indicate that outside directors exhibit greater concern about the discretionary component of corporate responsibility and a weaker orientation toward economic performance. No significant differences between the two groups were observed with respect to the legal and ethical dimensions of corporate social responsibility. Some explanations as well as limited generalizations and implications are developed.

Some argue that managers over-invest in corporate social responsibility (CSR) activities to build their personal reputations as good global citizens. Others claim that CEOs strategically choose CSR activities to reduce the probability of CEO turnover in a future period through indirect support from activists. Still others assert that firms use CSR activities to signal their product quality. We find that firms use governance mechanisms, along with CSR engagement, to reduce conflicts of interest between managers and non-investing stakeholders. Employing a large (...) and extensive sample of firms within Russell 2000, S& 500 and Domini 400 indices during the 1993-2004 period, we find that consistent with the conflict-resolution hypothesis, the CSR choice is positively associated with governance characteristics, including board independence, institutional ownership, and analyst following. In addition, after correcting for endogeneity of CSR engagement, our results show that CSR engagement positively influences operating performance and firm value, supporting the conflict-resolution hypothesis as opposed to the over-investment and strategic-choice arguments. We find only a weak support of the product-signaling hypothesis as a major motive of CSR engagement. (shrink)

This paper examines the influence of CEO career horizon problems on corporate social responsibility. We assume that as CEOs are getting older, they tend to disengage in CSR due to their shorter career horizons. We further argue that high levels of industry-level discretion and blockholder ownership amplify the negative effects of CEO age on CSR. Using a panel sample of US-based firms over 2004–2009, we do not find the main effect of CEO age on CSR, but find support for the (...) moderating effects, such that CEO age is negatively associated with CSR when there are high levels of ILD and blockholder ownership. Therefore, results suggest that CEO career horizon problems matter for CSR when CEOs have sufficient discretion over the firm’s strategic decisions and outside blockholders put more pressure on CEOs to engage in financial earning management. (shrink)