The role of board gender and foreign ownership in the CSR performance of Chinese listed firms

Abstract

China's recent promotion of Corporate Social Responsibility (CSR) has coincided with a marked increase in the number of Chinese listed firms attracting female board members and foreign equity investors. Using Rankins' (RKS) ratings over the 2009 to 2013 period, we show that greater gender balance in top-management supports stronger CSR performance. This finding broadens gender-based accounts emphasizing social networks (Westphal and Milton, 2000), Critical Mass Theory (Kramer et al., 2006;Bear et al., 2010;and Soares et al., 2011) and team dynamics (Woolley et al., 2010;and Hoogendoorn et al., 2013). Findings also reveal stronger CSR performance in firms with a female CEO. Female leadership thus appears to be just as important as gender mix in driving CSR change.CSR ratings are also increasing in foreign ownership levels. We examine whether a political-networking motivation underlies foreign investment (Du and Girma, 2010;Liu et al., 2014a;Lin et al., 2015;and Jiang and Kim, 2015). We argue that qualified foreign institutional investors (QFIIs) deploy socialengagement in non-SOEs to build competitive advantage. But in SOEs, where strong political networks already exist, QFIIs have less incentive to boost CSR ratings. However, results indicate little difference in the social ratings of QFII-invested SOEs and non-SOEs.Additionally, we confirm the Barnea and Rubin (2010) contention of an inversion in social ratings at entrenched managerial ownership levels. Non-linear rating effects also emerge in relation to state ownership (Li et al., 2013). Finally, CSR performance exhibits positive (negative) relation with a listed entity's size and age (leverage and lagged return-on-equity) but virtually no connection with independent board representation.

Women in the boardroom and their impact on climate change related disclosure

“…This focuses on gender diversity implicit to accounts emphasizing social networks (Westphal and Milton, 2000), Critical Mass Theory (Kramer et al, 2006;Bear et al, 2010) and team dynamics (Woolley et al, 2010;and Hoogendoorn et al, 2013). The spin-off benefits arising from diversity include enhanced monitoring, more incisive decision-making and greater transparency (McGuinness, et al, 2016).…”

Environmental policy, environmental performance, and financial distress in China: Do top management team characteristics matter?

“…Second, little is known about how this nexus changes in the presence of specific features of the TMT. Preceding studies have examined board and governance characteristics, as the main determinants of firm's social/environmental management and financial performance (Ben‐Amar & McIlkenny, ; Chang, Li, & Lu, ; Eleftheriadis & Anagnostopoulou, ; Galbreath, , ; Haque & Ntim, ; Jizi, ; Lau, Lu, & Liang, ; McGuinness, Vieito, & Wang, ; Ntim, ; Sullivan & Gouldson, ). Nevertheless, these scholars have neither investigated the impact of TMT characteristics on environmental performance/financial distress nor how they can moderate environmental performance–financial distress nexus.…”

“…In particular, through the communist party, political appointments to corporate boards are distinctively dominant than anywhere in the world (Li & Zhang, ; Marquis & Qian, ). At the same time, board gender diversity while observably improving, still discernibly substantially lacks behind that of developed countries (Liao, Luo, & Tang, ; McGuinness et al, ), often with board members having limited foreign experience and insights through foreign exposure (Lau et al, ). Yet the extent to which TMT characteristics, and particularly, extensive political connections, limited gender diversity and foreign exposure impact on environmental performance remains largely unexplored in China (Lau et al, ; Marquis & Qian, ; McGuinness et al, ), where excessive manufacturing and production have resulted in harmful and serious environmental concerns, including pollution, and therefore, firms are under immense institutional pressures to follow good statutory and global environmental management practices in order to increase their environmental performance (S. Wang, Li, & Zhao, ).…”

“…We also capture a diverse range of industries instead of just focusing on polluting industries and analyzed their environmental performance. Previously, a few studies (Marquis & Qian, ; McGuinness et al, ) have used the longitudinal dataset from China, and Lau et al () have also highlighted this shortcoming of studies related to environmental and social concerns that have been conducted in China. Finally, to control for the potential issues of endogeneities and interaction effects (as underlined in Andersson, Cuervo‐Cazurra, & Nielsen, ; Bettis, Gambardella, Helfat, & Mitchell, ), we used two‐stage least squares (2SLS) and generalized methods of moments (GMM) following the techniques of Baum, Schaffer, and Stillman () and Wooldridge ().…”

Board Composition and Corporate Social Responsibility Performance: Evidence from Chinese Public Firms

“…To the best of our knowledge, our study is the first to examine the impact of board members' political experience on a firm's CSR performance in China. Additionally, even though factors such as the gender diversity [33] and overseas experience of the board members [34] have been investigated in the literature, our study shows the latest trends in China by using the most recent data available. Moreover, our study is the first to explore the influence of the academic affiliation of the board members on Chinese firms' CSR performance because it is common to see scholars from academic institutions such as universities and research centers serving on firms' boards as independent directors in China.…”