Purpose This study aimed to investigate the impact of the board composition on financial performance in the restaurant industry from a stewardship theory perspective. Design/methodology/approach The composition of board was measured as the ratio of inside and outside directors. Firm performance was operationalized as return on assets (operational performance) and Tobin’s q (market-based performance). Panel regression analysis tested the research hypotheses. Findings Using data from 25 restaurant firms from 2007 to 2013, the study found an insignificant impact of board composition on operational performance. However, a higher proportion of inside board members increases market-based performance. A higher proportion of outside board members decreases market-based performance. Practical implications Supporting the basic tenets of stewardship theory, restaurant companies may consider changing the current practice of having a super-majority of outside directors and increase the inside board members. Because inside board member have greater experience with the organization and the industry, they have a better understanding of the status quo and are better able to respond to opportunities and threats in the environment. Originality/value Considering the scarcity of research on how the board composition affects firm performance in the hospitality context, the present study is a forerunner in its exploration of the impact of inside and outside directors on restaurant firms’ performance.

Purpose Based on the agency theory and risk management perspective, this study aims to examine the relationship between CEOs’ pay schemes and corporate social responsibility (CSR) activities in the restaurant industry. Specifically, the authors propose that CEOs with a higher proportion of equity-based compensation (EBC), which induces a greater propensity for risk-taking, are prone to indulge less in CSR. In addition, the authors investigate how institutional ownership moderates the proposed main relationship. Design/methodology/approach This study performs two-way fixed-effects models and clustered standard errors to test the proposed hypotheses. Findings The results of the panel analysis show a significant negative effect of CEOs’ EBC on CSR. Also, the authors found a significant positive moderating effect of institutional ownership between CEOs’ EBC and CSR. Originality/value Given the lack of empirical studies that incorporate both agency theory and the risk management perspective, and given the importance of understanding the determinants of restaurant firms’ CSR activities, this study expands upon the existing literature by showing the relationship between CEOs’ compensation schemes and restaurant firms’ CSR activities.