Does Board Supervisory Quality Enhance Corporate Social Performance?-Evidence from Taiwanese Listed Firms

Abstract

This study uses Taiwanese public firms as a sample to examine if board supervisory quality enhances CSP. The present study uses four proxies for supervisory quality of board at group level: board meeting attendance rate, number of board meetings, social capital of the board and average training hours of directors. We obtain 348 CSR data from an international CSR rating agent and match them with double size non-CSR firms. We find that CSR firms exhibit ISSN 1946-052X 2017 ajfa.macrothink.org 69 significantly higher board attendance rate, board meeting frequency and board social capital than non-CSR firms. For CSR firms, board attendance rate and board meeting frequency positively impact CSR ratings, implying that board diligence is essential to monitoring management to achieve higher social objectives. However, board social capital and training significantly but negatively impact CSP, implying busy board and inexperienced board detriments CSP. Asian Journal of Finance & AccountingBoard success in CSR means directors must be passionate about the issues on CSR. Additionally, firms that are behind social agenda need to recruit resourceful directors to diversify information base for advises about stakeholder issues and trends. Firms that have taken steps in CSR activities should not recruit overly busy directors or inexperienced directors. Our paper provides both theoretical and practical implications.

A Review of Board of Director, Shariah Supervisory Board and Zakat Distribution Performance in Malaysia

“…All of these measurements can be used as a guide in determining the quality of board of director's performance to the organization. Thus, for this study, size and expertise of board (Suhaily et al, 2016) and the number of board meetings (Yeh & Hsieh, 2017;Khanchel, 2007) seen fit practiced for zakat institutions in order to improve their performance.…”