When Boards Matter: The Case of Corporate Social Irresponsibility

Abstract

While academic research has made remarkable progress in understanding corporate social responsibility (CSR), we have scant understanding of corporate social irresponsibility (CSiR). This paper adopts a stakeholder‐agency perspective towards CSiR to ask two related questions: (1) What board‐level structures can monitor management to reduce CSiR? and (2) What are the conditions that render board monitoring more effective? Employing a unique objective measure of CSiR and a sophisticated system generalized method of moments with dynamic panel model on a sample of publicly listed firms in the USA between 2002 and 2015, this paper demonstrates how firms with a specific board‐level governance bundle (i.e. a large, more independent board, with a board CSR committee, a higher proportion of women within boards with frequent director activity) are better equipped to reduce irresponsible behaviours, both in terms of number of irresponsible incidents as well as in terms of their economic costs to the firm. Moreover, the effectiveness of this governance bundle sustains under conditions of high institutional ownership and high board remuneration. This paper has implications for CSR and corporate governance literatures, as well as for managers and policymakers.

Sustainable Brand Management of Alimentary Goods

“…So, they have constructed regression model with significant factors affecting the final subjectively perceived brand value as well as they have identified critical points of this model implementation when applying it to cross-cultural environment. Regional specifics in perception of brand value sources with implications to brand loyalty have been discussed by Sukalova et al, Tamuliene and Pilipavicius, Rozgina, Jain and Zaman, and Christodoulides et al These authors have verified the effectiveness of traditional Aaker's quadratic model of brand value sources in the wider perspective of unified European single market as well as individual national markets, formulating advices for the practice of international brand value management [35][36][37][38][39].…”

“…In scope of these facts, it is also disputable the phenomenon of so-called love brands and its effectiveness in the process of brand loyalty creation and management [22]. When analyzing these findings, it is possible to apply specific point of view based on the regional psychographic specifics of consumers [34][35][36][37][38][39]. It is because we have accepted theories from authors who investigated regionally closer markets, while the theories of other authors have been rejected.…”

Are women eco‐friendly? Board gender diversity and environmental innovation

“…Empirical evidence supports this contention. For example, gender-diverse boards are associated with higher corporate social responsibility (CSR) practices (Nadeem, Zaman, & Saleem, 2017), fewer securities frauds (Cumming, Leung, & Rui, 2015), and fewer incidences of corporate social irresponsibility (Jain & Zaman, 2019). By the same token, it can be argued that female representation on boards will be more likely to promote corporate policies concerning environmental innovation.…”

Women on boards and corporate social irresponsibility: evidence from a Granger style reverse causality minimisation procedure

“…There are manifold examples of reverse causality problems being discussed in the literature examining the relationship between board diversity and financial risk: Pandey et al (2019) discuss reverse causality regarding the cost of debt, Lu and Boateng (2018) regarding credit risk, Lanis, Richardson, and Taylor (2017) regarding tax aggressiveness, Farag and Mallin (2017) regarding financial fragility, and Sila, Gonzalez, and Hagendorff (2016) for firm total risk, systematic risk and idiosyncratic risk. Reverse causality also affects studies of the relationship between female board representation and the fines or penalties received by a firm (Jain and Zaman 2020). Reverse causality is also identified as a key methodological issue by Zalata et al (2019) In summary, reverse causality concerns are ubiquitous in the literature on board gender diversity.…”

“…Bennouri et al 2018;Lins et al 2019;Liu, Wei, and Xie 2014;Post and Byron 2015), corporate costs of debt (Pandey et al 2019;Usman et al 2019), mergers and acquisitions behaviour (e.g. Levi, Li, and Zhang 2014), firm risk (Lin and Poon 2019;Sila, Gonzalez, and Hagendorff 2016), earnings quality (Srinidhi, Gul, and Tsui 2011), accounting quality (García Lara et al 2017), lawsuits (Adhikari, Agrawal, and Malm 2019), fines (Jain and Zaman 2020), leverage (Faccio, Marchica, and Mura 2016), or board attendance (e.g. Adams and Ferreira 2009).…”