Board Gender Diversity and Corporate Social Performance in Different Industry Groups: Evidence from China

Khwaja Naveed,Fawad Rauf,Cosmina L Voinea,Zahid Ali,Cosmin Fratostiteanu

doi:10.3390/su13063142

Khwaja Naveed, Fawad Rauf + Show 3 more

Open Access

https://doi.org/10.3390/su13063142

Copy DOI

Abstract

This paper examines the heterogeneous links between board gender diversity and corporate social performance in different industries across China. OLS regression models are approximated using the data of Chinese industries from 2009 to 2015. Robustness test and two-stage least square (2SLS) methods are incorporated to cater for robustness and endogeneity. Board gender diversity (BGD) stimulates corporate social performance (CSP) of firms with environmental and social risk exposure regardless of critical mass and directors’ independence. It does so for firms with governance risk exposure while incorporating the critical mass effect and the director’s independence. Overall, the positive effect of BGD is prevalent in different industries at an aggregate level while considering firms with an overall ESG risk exposure. The findings imply that BGD can mitigate the ESG risk exposure in terms of enhancing the CSP and the advantage can be transpired with the inclusion of even one female director (independent or executive) to the board. The study also highlights that BGD enhances CSP in industries with more environmental and social risk exposure while doing so in industries with governance risk exposure after complementation by critical mass and independent director effects.

Highlights

Corporate social responsibility (CSR) has been considered a voluntary contribution of corporate entities for the benefit of the environment and society [1,2], while activities related to CSR were deemed as an obligation towards stakeholders and society
Reflecting on the instrumental stakeholder theory, resource dependence theory and upper echelon theory, we suggest regarding the differentiated relationship of Board gender diversity (BGD) and corporate social performance (CSP) under the contextual moderating role of different industries
Model 1 shows the direct impact of board gender diversity on corporate social performance indicating the confirmation of hypothesis (H1)

Summary

Introduction

Corporate social responsibility (CSR) has been considered a voluntary contribution of corporate entities for the benefit of the environment and society [1,2], while activities related to CSR were deemed as an obligation towards stakeholders and society Today, it has evolved into a benchmark in the firm-level performance appraisal system [1,3]. A three-dimensional model of Environmental, Social and Governance (ESG) implication has been evolved by different agencies in various ways [4,5] This progression has diversified the role and responsibilities of boards to reflect on and decide for the long-term value creation of firms. The complex nature of CSR and omitting the contextual and institutional factors in the analysis discourse leads to this inconclusiveness [11]

Objectives

Methods

Results