Board nationality and educational background diversity and corporate social performance

Abstract

Purpose This paper aims to examine the relationship between the nationality and educational background diversity of directors serving on corporate boards and the firms’ corporate social performance (CSP). Design/methodology/approach This study measures nationality diversity by directors’ national citizenship and measures educational background diversity by countries from which they earned their undergraduate and post undergraduate degrees. It measures firms’ CSP using the MSCI ESG ratings. The study uses both univariate and multivariate analyses to empirically test the hypotheses. Findings Using a sample of US firms, the authors find that board nationality diversity and educational background diversity are positively associated with CSP. The findings suggest that improving director nationality diversity and educational background diversity could improve firms’ social performance. Originality/value This study shows that the increasing trend of foreign nationals in the US boards could shift the focus of US corporations to be more stakeholder-oriented.

The importance of diversity on boards of directors’ effectiveness and its impact on innovativeness in the bioeconomy

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Board of directors network centrality and environmental, social and governance (ESG) performance

“…Extant literature has found that corporate governance effectiveness, monitoring, and corporate decision-making are influenced by board of directors' informal professional and social networks (Alipour et al, 2019;Cohen, Frazzini, and Malloy, 2008;Harjoto, Laksmana and Yang, 2019;Hochberg, Ljungqvist, and Lu, 2007;Kuhnen, 2009;Seidel, Polzer, and Stewart, 2000). For instance, Cohen et al (2010) find that sell-side analysts who have educational connections with companies' board of directors tend to perform better in their stock recommendations.…”

The impact of the characteristics and behaviors of the board of directors on agency costs in Iran

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