Board Composition and Corporate Social Responsibility: An Empirical Investigation in the Post Sarbanes-Oxley Era

Although the composition of the board of directors has important implications for different aspects of firm performance, prior studies tend to focus on financial performance. The effects of board composition on corporate social responsibility (CSR) performance remain an under-researched area, partic...

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Bibliographic Details
Published in:Journal of business ethics 2013-05, Vol.114 (3), p.381-392
Main Authors: Zhang, Jason Q., Zhu, Hong, Ding, Hung-bin
Format: Article
Language:English
Subjects:
Board of directors
Boards of directors
Business and Management
Business Ethics
Business structures
Corporate boards
Corporate governance
Corporate responsibility
Corporate social responsibility
Education
Ethics
Financial performance
International
Leadership
Legitimacy
Listed companies
Management
Modeling
Organizational effectiveness
Organizational structure
Outside directors
Philosophy
Proportions
Public Company Accounting Reform & Investor Protection Act 2002-US
Quality of Life Research
Social responsibility
Sociology
Sociology of organizations and enterprises. Bureaucracy and administration
Sociology of work
Sociology of work and sociology of organizations
Stakeholders
Stock exchanges
Strategic management
Studies
U.S.A
Women
Working population. Employment. Women's work
Written composition
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Summary:Although the composition of the board of directors has important implications for different aspects of firm performance, prior studies tend to focus on financial performance. The effects of board composition on corporate social responsibility (CSR) performance remain an under-researched area, particularly in the period following the enactment of the Sarbanes-Oxley Act of 2002 (SOX). This article specifically examines two important aspects of board composition (i.e., the presence of outside directors and the presence of women directors) and their relationship with CSR performance in the Post-SOX era. With data covering over 500 of the largest companies listed on the U.S. stock exchanges and spanning 64 different industries, we find empirical evidence showing that greater presence of outside and women directors is linked to better CSR performance within a firm's industry. Treating CSR performance as the reflection of a firm's moral legitimacy, our study suggests that deliberate structuring of corporate boards may be an effective approach to enhance a firm's moral legitimacy.
ISSN:0167-4544
1573-0697
DOI:10.1007/s10551-012-1352-0