Abstract
A growing body of research suggests that having more women in the boardroom leads to better corporate social responsibility (CSR) performance. However, much of this work views the CSR-enhancing effect of women directors as largely driven by their moral orientations and rarely considers other underlying mechanisms. Moreover, less explored are the firm-specific conditions under which such CSR-promoting roles of female directors might be performed more (or less) effectively. In this paper, we seek to bridge this gap in the literature by (1) proposing an additional account for the positive influence of female independent directors on the firm’s CSR and (2) illuminating the organizational context in which female directorship is likely to translate into good CSR performance. We argue that women independent directors might take CSR issues more seriously than their male counterparts not only because of their stronger moral orientations, but also because they have reputational reasons to do so. Further, we suggest that female directors’ concerns about CSR-relevant matters are more (less) likely to gain support from other members of the organization when their company is doing more (less) business in the product markets where reputation for CSR is more (less) vital for success. Using a sample of Standard & Poor’s (S&P) 1500 index firms (2000–2009) and the data on their board composition and CSR ratings, we find strong support for our argument. We find that the number (or proportion) of women independent directors is positively associated with a firm’s CSR ratings and that the strength of this relationship depends on the level of the firm’s consumer market orientation.
Highlights
In recent years, corporate social responsibility (CSR) has become one of the major concerns for many companies and their managers [1,2,3]
Apart from the intrinsic propensity of women to care about moral and social issues, reputational concerns of women independent directors can influence how actively and thoroughly they will perform their board role pertaining to CSR
We have suggested that female independent directors are likely to take a leading role in CSR-relevant domains because these domains are where they can exhibit their expertise and competence and because their firm’s reputation for CSR can affect their labor market value
Summary
Corporate social responsibility (CSR) has become one of the major concerns for many companies and their managers [1,2,3]. There are even sets of self-regulatory measures devised and collectively taken by members of industry-level associations [5] All of these observations suggest that, at least on the surface level, CSR has emerged as an important theme of management in the contemporary corporate boardroom. Not all companies care about the matters pertaining to non-shareholding stakeholders—such as employees, consumers, and the community—and voluntarily dedicate their resources to social and environmental initiatives intended to promote those parties’ welfare. What explains this variation in CSR efforts and performance among firms? The precise degree to which those firms substantively implement CSR policies and practices in order to fulfill their commitment is subject to further empirical scrutiny, but such a question is beyond the scope of the current inquiry
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