An international approach of the relationship between board attributes and the disclosure of corporate social responsibility issues

Abstract

Firms interested in being perceived by all stakeholders and society as drivers of corporate social responsibility (CSR) activities, especially regarding CSR reporting, should have boards of directors that defend not only shareholder interests but also all stakeholders' needs. Thus, we expect that efficient boards, particularly if well-structured, will impact on CSR disclosure. As a result, in this paper, we examine the effect of board composition, particularly board size, board independence, board gender diversity, chief executive officer (CEO) duality, and CSR board committee, on CSR reporting. Using a sample of international firms, concretely 13,178 observations belonging to 39 countries, we hypothesize that all these attributes positively affect CSR disclosure, except board independence and CEO duality, which are expected to impact negatively. These hypotheses are theoretically supported by the agency and stakeholder perspectives. Our findings support all the hypotheses, except that of CEO duality, and therefore, we conclude that board characteristics such as board size, board gender diversity, and CSR board committees encourage the disclosure of CSR matters, whereas board independence discourages this reporting. Contrary to our predictions, CEO duality has a positive effect on CSR reporting. KEYWORDS board gender diversity, board independence, board size, CEO duality, CSR board committee, CSR reporting, international perspective

The effect of the size of the board of directors on corporate social performance: A meta‐analytic approach

“…The positive effect of boards' size on CSP is consistent with instrumental stakeholder theory, because larger and more diverse boards are more likely to represent the aims, interests, and wishes of a company's stakeholders, facilitating and promoting the adoption of proactive environmental and social strategies, which has a direct and positive effect on CSP. This result is line with previous research that found a positive association between the two constructs (De Villiers et al, ; Jamali, Safieddine, & Rabbath, ; Jizi, ; Lagasio & Cucari, ; Pucheta‐Martínez & Gallego‐Álvarez, ). The robustness of this finding was evaluated using the statistics Q test and I 2 .…”

The link among board characteristics, corporate social responsibility performance, and financial performance: Evidence from the hospitality and tourism industry

“…First, monitoring managers is important to ensure that their decisions and actions are in line with shareholders' interests, and other stakeholders' expectations and interests (Godos-Díez, Cabeza-García, Alonso-Martínez, & Fernández-Gago, 2018). In this context, a board of directors acts as an effective monitoring mechanism for protecting stakeholders' interests (Pucheta-Martínez & Gallego-Álvarez, 2019), ensuring the fulfillment of ethical, social, and environmental responsibilities (García Martín & Herrero, 2019), and encouraging the management team to get involved in CSR activities (Pucheta-Martínez & Gallego-Álvarez, 2019). Second, the resource dependence theory refers to board capital, consisting of human capital (i.e.…”

“…From the perspective of upper echelons theory, directors with different knowledge, skills, and expertise may influence a firm's strategic decisions, and thus improve its financial and non-financial performance (Shahab et al, 2018). Research has shown that female directors tend to have more ethical and social abilities than their male counterparts and are more likely to behave socially and environmentally responsibly (Pucheta-Martínez & Gallego-Álvarez, 2019). In this context, females in upper echelons can urge the board to make relevant decisions concerning CSR issues and encourage management to undertake CSR-related activities, which lead to greater CSRP.…”

“…The creation of CSR/sustainability committees may reflect a firm's willingness to engage in CSR practices to meet stakeholders' needs (Mallin & Michelon, 2011). According to resource dependence theory, a CSR/sustainability committee can be regarded as an important human capital resource element that supervises all issues related to CSR activities (Pucheta-Martínez & Gallego-Álvarez, 2019) and promotes socially and environmentally responsible management (Amran et al, 2014). In terms of empirical evidence, García Martín and Herrero (2019), Godos-Díez et al (2018), Hussain et al (2018), and Mallin and Michelon (2011) showed that the existence of a board sub-committee responsible for CSR issues positively impacted firms' CSR engagement.…”

Management Financial Incentives and Firm Performance in a Sustainable Development Framework: Empirical Evidence from European Companies

“…Since our findings revealed that board gender diversity has improved the overall companies' value and earnings, policymakers may set a minimum share of female representatives on board management of the European companies, to be enclosed within the CG rules. Women may heighten the existing activities of the companies by mostly orientation towards social and environmental actions [83], female representatives being "more philanthropically driven and community-oriented" than male counterparts [15] (p. 9), or more focused on reporting quality [22].…”