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

Abstract

The aim of this study is twofold: to explore whether board characteristics (i.e. a sustainability committee, board independence, board diversity, and board diligence) lead to greater corporate social responsibility (CSR) performance, and to test whether CSR performance enhances firms' financial performance in the hospitality and tourism (H&T) industry. Data were collected from the Thomson Reuters Eikon database for the H&T firms listed there between 2011 and 2018. We employed panel data analysis, after which we ran robustness tests. The results indicated that having a CSR committee and female directors on the board are robust factors driving firms to show superior CSR performance in all dimensions, including environmental, social, and governance (ESG). Independent directors and directors' diligence selectively enhance the overall CSR score and individual pillars of CSR. Investigating the relationship between CSR performance and firms' financial performance did not produce a significant outcome. The findings propose a straightforward roadmap for H&T firms and policymakers to identify characteristics of CSRfriendly boards.

Trends in the dynamic evolution of board gender diversity and corporate social responsibility

“…The articles included in this review study the relationship between the diversity of the board of directors and the CSR using multiple dependent variables, as can be seen in Figure 2. The following stand out among them: CSR as social responsibility, social performance or sustainability performance (Bear et al, 2010; Beji et al, 2020; Boulouta, 2013; Byron & Post, 2016; Cruz et al, 2019; Fernandez et al, 2019; Francoeur et al, 2019; García‐Sánchez et al, 2018; Hafsi & Turgut, 2013; M. A. Harjoto & Rossi, 2019; Landry et al, 2016; Macaulay et al, 2018; McGuinness et al, 2017; Setó‐Pamies, 2015; Uyar et al, 2020; Zhang et al, 2013; Zhuang et al, 2018), environmental performance (Birindelli et al, 2019; Cordeiro et al, 2020; Elmagrhi et al, 2018; Lu & Herremans, 2019; Walls et al, 2012), environmental investment (Atif et al, 2020; Jiang & Akbar, 2018; Wei et al, 2017), environmental lawsuits (Liu, 2018), corporate philanthropy or charitable contributions (Campopiano et al, 2019; Jia & Zhang, 2013; Williams, 2003; Wonsuk & Abebe, 2016; Zhang et al, 2018) and CSR assurance (Liao et al, 2018). Rodriguez‐Dominguez et al (2009) analyze the process of creating and implementing a code of ethics.…”

“…Francoeur et al, 2019;García-Sánchez et al, 2018;Hafsi & Turgut, 2013;M. A. Harjoto & Rossi, 2019;Landry et al, 2016;Macaulay et al, 2018;McGuinness et al, 2017;Setó-Pamies, 2015;Uyar et al, 2020;Zhang et al, 2013;Zhuang et al, 2018), environmental performance(Birindelli et al, 2019;Cordeiro et al, 2020;Elmagrhi et al, 2018;Lu & Herremans, 2019;Walls et al, 2012), environmental investment(Atif et al, 2020;Jiang & Akbar, 2018;Wei et al, 2017), environmental lawsuits(Liu, 2018), corporate philanthropy or charitable contributions(Campopiano et al, 2019;Jia & Zhang, 2013;Williams, 2003;Wonsuk & Abebe, 2016;Zhang et al, 2018) and CSR assurance(Liao et al, 2018) Rodriguez-Dominguez et al (2009). analyze the process of creating and implementing a code of ethics.…”

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

“…The sustainability indicators (particularly, a policy sustainable packaging, but also a sustainability committee, energy use, renewable energies) also have positive effects on the financial performance of considered companies. Moreover, CSR policies, enforced at the level of board management, may induce "a domino effect" further down, at the level of executive management and upon the actions of all employees, as Uyar et al [15] (p. 9) also proved. We have highlighted that the renewable energy and corporate governance board committee had the utmost favorable effects on companies' value and earnings.…”

“…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].…”

“…Therefore, given the results obtained and debatable underpinnings on this subject, our paper contributes with several components to the literature. First, it brings new insights on the board compensation and structure, on one hand, and companies' performances, on the other hand, in synergy with CG and CSR for various European industries (most of previous research being focused either on a specific industry, like tourism [15] banking [4,5,16], textile [17] or on specific European countries, like, Portugal [18], Germany [7], Norway and Sweden [19], the United Kingdom [20] or Italy [21], while fewer papers have focused on a panel comprising many countries in Europe [12,22]). Second, based on updated data provided by the Thomson Reuters Eikon for 2019 and the first months of 2020 [14] from different countries, we will ensure the heterogeneity of variables included in the econometric analysis (especially, dependent variables) and the robustness of our findings.…”