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)

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)

This paper examines the relationship between CEO incentives and strong and weak corporate social performance. Using the KLD database we find that incentives have no significant relationship with strong social performance. Salary and long-term incentives have a positive association with weak social performance.

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.

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)

Corporate social reporting, while not mandatory in most countries, has been adopted by many large companies around the world and there are now a variety of competing global standards for non-financial reporting, such as the Global Reporting Initiative and the UN Global Compact. However, while some companies (e. g., Henkel, BHP, Johnson and Johnson) have a long standing tradition in reporting non-financial information, other companies provide only limited information, or in some cases, no information at all. Previous studies have suggested (...) that there are, country and industry-specific, differences in the extent of CSR reports (e. g., Kolk et al.: 2001, Business Strategy and the Environment 10, 15-28; Kolk: 2005, Management International Review 45, 145-166; Maignan and Ralston: 2002, Journal of International Business Studies 33(3), 497-514). However, findings are inconclusive or contradictory and it is often difficult to compare previous studies owing to the idiosyncratic methods used in each study (Graafland et al.: 2004, Journal of Business Ethics 53, 137-152). Furthermore, previous studies have relied mainly on simple measures, such as word counts and page counts of reports, to compare the extent of reporting that may not capture significant differences in the content of the reports. In this article, we seek to overcome some of these deficiencies by using textual analysis software and a more robust statistical method to more objectively and reliably compare the CSR reports of firms in different industries and countries. We examine a sample of leading companies in four countries (US, UK, Australia, and Germany) and test whether or not membership of the Global Compact makes a difference to CSR reporting and is overcoming industry and country specific factors that limit standardization. We conclude that GlobalCompact membership is having an effect only in certain areas of CSR reporting, related to the environment and workers, and that businesses from different countries vary significantly in the extent to which they promote CSR and the CSR issues that they choose to emphasize in their reports. These country differences are argued to be related to the different institutional arrangements in each country. (shrink)

. This paper examines the association between long-term compensation and corporate social responsibility for 90 publicly traded Canadian firms. Social responsibility is considered to include concerns for social factors and the environment, 564-578; Kane, E. J., 341-359). Long-term compensation attempts to focus executives efforts on optimizing the longer term, which should direct their attention to factors traditionally associated with socially responsible executives. As hypothesized, we found a significant relationship between the long-term compensation and total CSR weakness as well as the (...) product/environmental weakness dimension of CSR. In addition, we found a marginally significant relationship between long-term compensation and total corporate responsibility. Our findings are that executives long-term compensation is associated with a firms environmental actions, and that firms that utilize long-term compensation are more likely to mitigate product/environment weaknesses than those that do not. Implications for practice and research are discussed. (shrink)

In today's world, the corporate image of the largest companies is closely linked to their performance in the field of corporate social responsibility and the disclosure of information on that topic, specifically, on climate change. Since the Board of Directors is the body responsible for this process, the aim of this article is to show the role that companies' Boards of Directors play in the accountability process vis-à-vis stakeholders in relation to one specific aspect which has enormous significance in environmental (...) information: practices used to monitor greenhouse gas emissions. In order to achieve this, we shall verify certain business characteristics, in addition to the size and activity of the Board of Directors, and we shall take different dependence models into consideration. These models will include variables related to the level of independence and diversity of the Board of Directors, which interact with dummy variables representing the company's litigation risks regarding environmental behavior and the institutional macro-context of the organization's country of origin. The results make it clear that Boards of Directors are basically focused on the traditional responsibility of creating economic value, instead of dealing with today's broader business world concepts, which include social responsibility. This focus, therefore, does not favor the accountability process before other stakeholders, if this makes it more difficult to protect the interests of shareholders. (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.

This study examines the presence and roles of female directors of U.S. Fortune 500 firms, focusing on committee assignments and director background. Prior work from almost two decades ago concludes that there is a systematic bias against females in assignment to top board committees. Examining a recent data set with a logistic regression model that controls for director and firm characteristics, director resource-dependence roles and interaction between director gender and director characteristics, we find that female directors are less likely than (...) male directors to sit on executive committees and more likely than male directors to sit on public affairs committees. There is little if any evidence of systematic gender bias in director assignment to other board committees. We find some evidence that boards evaluate resource dependence differently for women than men. (shrink)

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)

Has the diversity of corporate boards of directors improved? Should it? What role does diversity play in reducing corporate wrongdoing? Will diversity result in a more focused board of directors or more board autonomy? Examining the state of Tennessee as a case study, the authors collected data on the board composition of publicly traded corporations and compared those data to an original study conducted in 1995. Data indicate only a modest improvement in board diversity. This article discusses reasons for the (...) scarcity of women on boards and concludes that, to enhance strategic decisions, board membership should reflect the corporation''s consumer population. Thus, women are a critical but overlooked resource. Areas for future research are also considered. (shrink)

This article examines the extent to which diversity characteristics and stakeholder role influence individuals’ corporate social orientation (CSO). Our findings indicate that one’s relationship to the organization as well as diversity, gender, and race influence one’s CSO. Specifically, we found that employees’ greatest concern was economic whereas customers had a stronger ethical orientation. The results also suggest that women as well as Black employees and customers place more emphasis on whether an organization is fulfilling its discretionary responsibilities than do males (...) and Whites. A model using the concept of value congruence is presented to guide future research. (shrink)

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 (ECSR) 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 (KLD) 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)

Since Ackerman in Corporate social responsiveness, the modern dilemma (1973), pleaded for the institutionalisation of corporate social performance (CSP) in business processes, researchers have focused on the role of strategy in CSP. This article demonstrates that CSP is institutionalised within the governance structure. We will attempt to make this clear by means of a description of the Dutch system of corporate governance. Under certain circumstances Dutch companies are already bound to CSP due to prevailing legislation. A governance perspective shows that (...) CSP is institutionalised within a company’s governance structure. “Processes of responsiveness”, since long regarded as a starting point of CSP-analysis, appear to be decision-making processes. Within these processes the expectations of the stakeholders can be institutionalised, trust can be built and interests can be incorporated. This makes CSP context-dependent. However, it is possible to analyse companies by comparing the companies’ individual governance structures. The article concludes that CSP-analysis can fruitfully extend into analysing in the role of the stakeholders in the influence-pathways that are incorporated within the governance structure. (shrink)

This study investigates the effects of internal and external corporate governance and monitoring mechanisms on the choice of corporate social responsibility (CSR) engagement and the value of firms engaging in CSR activities. The study finds the CSR choice is positively associated with the internal and external corporate governance and monitoring mechanisms, including board leadership, board independence, institutional ownership, analyst following, and anti- takeover provisions, after controlling for various firm characteristics. After correcting for endogeneity and simultaneity issues, the results show that (...) CSR engagement positively influences firm value measured by industry-adjusted Tobin’s q. We find that the impact of analyst following for firms that engage in CSR on firm value is strongly positive, while the board leadership, board independence, blockholders’ ownership, and institutional ownership play a relatively weaker role in enhancing firm value. Furthermore, we find that CSR activities that address internal social enhancement within the firm, such as employees diversity, firm relationship with its employees, and product quality, enhance the value of firm more than other CSR subcategories for broader external social enhancement such as community relation and environmental concerns. (shrink)

Work group diversity, the degree to which there are differences between group members, may affect group process and performance positively as well as negatively. Much is still unclear about the effects of diversity, however. We review the 1997-2005 literature on work group diversity to assess the state of the art and to identify key issues for future research. This review points to the need for more complex conceptualizations of diversity, as well as to the need for more empirical attention to (...) the processes that are assumed to underlie the effects of diversity on group process and performance and to the contingency factors of these processes. (shrink)

Companies are beginning to recognise the concept of Corporate Social Responsibility as presenting a new business model and an opportunity for building innovative forms of competitive advantage. Boards are instrumental in shaping and overseeing such strategies and active engagement around what it means to be a responsible and responsive enterprise can strengthen the Board's potential as a strategic influence on long-term value creation. Yet many companies align with Friedman's contention that adopting and practising CSR is a distraction from their core (...) obligation, which is to act in their shareholders' best interests. Based on directors' perceptions, the paper examines responses by Boards to socially related aspects of their governance role and reports on their external orientation and receptiveness toward wider social obligations. The findings suggest that these Boards hold a narrow view of their fiduciary duty, which is closer to the shareholder model than the stakeholder approach to corporate governance. (shrink)

The purpose of this study is to examine the relationship between the corporate social performance of an organization and three variables: the size of the organization, the financial performance of the organization, and the environmental performance of the organization. By empirically testing data from 1987 to 1992, the results of the study show that a firm's corporate social performance is indeed impacted by the size of the firm, the level of profitability of the firm, and the amount of pollution emissions (...) released by the firm. (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)

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)

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)

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)

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.

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)

The central question posed in this paper will be how to organize board composition in order to ensure responsible corporate governance both from a CSR and a good governance perspective. Adopting a stakeholder approach to corporate governance, we analyze the arguments given by different theoretical approaches for linking specific board composition with financial performance and CSR, and discuss the empirical research conducted. Despite the inconclusive findings of empirical research, it can be argued that diverse stakeholders on the board will promote (...) CSR activities of the firm, but at the same time will increase board capital (which ultimately may lead to a better financial performance). Finally, we propose a model for selecting board members based both on ethical and pragmatic arguments. (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)

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)

The successes and failures of organizations are contingent on the decisions of senior management and its board of directors. Personality and experiences may have a tangible effect on the decision making process. This study assesses whether or not gender has a tangible effect on an organization’s decisions. A sample of Fortune 500 companies were examined to determine whether companies with a higher proportion of women on their boards of directors are more socially responsible. In general, a diversity of people generates (...) a diverse set of opinions that impacts and improves the decision-making process. Our expectation was that gender diversity will increase socially responsible behavior by a corporation. The results of this study confirm our research question; an association was found between the number of female directors on a corporate board and the incidence of corporate social behavior including: charitable giving, community involvement, and outside recognition of employee benefits. (shrink)