Do chief sustainability officers and CSR committees influence CSR-related outcomes? A structured literature review based on empirical-quantitative research findings

Patrick Velte,Martin Stawinoga

doi:10.1007/s00187-020-00308-x

Abstract

Although an increasing amount of empirical research has been linked to the impact of management control and governance on corporate social responsibility (CSR) issues since the financial crisis of 2008/09, heterogeneous results have characterised this research field. Regarding the group level of corporate governance, the efficacy of board committees (e.g., audit, compensation or CSR committees) has been included in recent research designs. However, analyses of corporate governance at the individual level are related to the effects of top management members [e.g., chief executive officer (CEO), chief financial officer (CFO) or chief sustainability officer (CSO)] on CSR outcomes. This paper aims to convey a detailed understanding of sustainable management control’s impact as CSR-related board expertise. In more detail, we focus on the influence of both CSR committees and CSOs on three CSR measures mainly analysed in empirical-quantitative research: (1) CSR reporting; (2) CSR assurance (CSRA); and (3) CSR performance. We motivate our analysis with increased relevance from practical, regulatory and research perspectives, and we employ a systematic literature review of the symbolic vs. substantive effects of sustainability-related board composition. Based on our theoretical model (legitimacy theory, stakeholder theory and upper-echelons theory), we selected 48 quantitative peer-reviewed empirical studies on this research topic. Our analysis shows that CSR committees positively influence CSR reporting and performance. Thus, there are indications that the implementation of a CSR committee is not a symbolic act, but instead substantively contributes to CSR activities. However, in light of inconclusive empirical research results and a lack of studies that have analysed CSO-related effects, a notable research gap has been identified. Moreover, we note the main limitations of prior research in this review and develop an agenda with useful recommendations for future studies.

Highlights

Since the financial crisis of 2008/09, unethical and obscure management strategies, which include greenwashing and information overload behaviour, have reduced stakeholder trust in public interest entities’ (PIEs’) activities in corporate social responsibility (CSR)1 significantly (Fassin and Gosselin 2011)
We focussed on the basic characteristics of our sample of included literature, including time of publication, country, journal of publication, selection of independent variables (CSR committee and chief sustainability officer (CSO)) and dependent variables, such as CSR-related effects, theoretical frameworks and the methodology used in empirical-quantitative research
In light of the heterogeneous results in prior research and according to the research questions based on our theoretical framework, it remains unclear whether boards of directors include these institutions for intrinsic motivations to substantially increase CSR strategies within the firm, or use CSOs and CSR committees only as symbols to attract stakeholders

Summary

Introduction

Since the financial crisis of 2008/09, unethical and obscure management strategies, which include greenwashing and information overload behaviour, have reduced stakeholder trust in public interest entities’ (PIEs’) activities in corporate social responsibility (CSR) significantly (Fassin and Gosselin 2011). In modern sustainable management systems, institutionalised sustainabilityrelated board expertise is represented mainly by two mechanisms: CSR committees and chief sustainability officers (CSOs), who manage CSR issues. The implementation of both CSR committees and CSOs remains voluntary from an international perspective (Jaggi et al 2018b). As the CSO may take on different levels of responsibility in the corporate hierarchy, a CSO’s authority may differ substantively across organisations (Miller and Serafeim 2014) This leads in practice to different ways in which the CSO may promote an entity’s CSR strategy. If the Chief Executive Officer (CEO) or Chief Financial Officer (CFO) serves simultaneously as the entity’s CSO, the CSO may serve in a prominent and powerful position within the company to foster its CSR activities

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Conclusion