Corporate Social Performance Of Firms Research Articles

Female talent and corporate social performance

This paper analyzes the relationship between female talent and corporate social performance (CSP). Using a sample of US firms from the COMPUSTAT database between 1991 and 2013, we investigate how state-level Paid Family Leave (PFL) laws affect firm CSP. We find that reducing barriers to female employment positively impacts firms' social performance, as measured by corporate social responsibility (CSR) scores. Our results show that firms headquartered in states with effective PFL laws have higher CSR strengths and lower CSR concerns. Additionally, the positive impact of PFL laws on CSP is more pronounced for firms included in the Working Mother Magazine's 100 Best Companies List. Our study provides important insights for policymakers and corporate leaders on the benefits of supporting female employment through PFL laws.

Family firms, national culture and corporate social performance: a meta-analysis

PurposeExtant literature is ambiguous on the corporate social performance (CSP) of family firm. This paper aims to synthesize existing evidence of the relationship between family firm and corporate responsibility performance, and to examine the moderating effects of national culture.Design/methodology/approachThe paper is based on a meta-analysis of the relationship between family firm and CSP, as well as the role of national culture on shaping this relationship.FindingsThe findings show evidence of greater CSP among family firms compared to nonfamily firms. The family firm–CSP relationship was moderated by cultural values such as ingroup collectivism, humane orientation and future orientation, and the moderating effects depended on cultural tightness.Originality/valueThe results help reconcile inconclusive prior findings, and elucidates family firms' corporate social responsibility in different cultures.

Which country characteristics support corporate social performance?

AbstractAs a growing number of firms are investing in social and environmental sustainability, academics and practitioners are increasingly becoming concerned with studying the factors that drive firms to achieve higher corporate social performance (CSP). This paper aims to contribute to the literature investigating country‐level characteristics that influence the magnitude of firm CSP based on the framework of the antecedents of green innovation. By conducting a cross‐lagged analysis of more than 370 European B Corps—a growing form of social enterprise, this paper investigates how firm CSP is impacted by the regulatory framework, the technological capacity, and the demand pressures of the country in which it is embedded. Our findings support that the presence of technological and innovation capacities and of demanding, conscious customers are the two most important country‐level factors impacting CSP. Results bespoke of the importance to develop a policy approach that supports the development of technological skills at the firm's level and the awareness at the demand level, rather than emphasizing a stricter regulation.

Proactive government intervention, board gender balance, and stakeholder engagement in China and Europe

This study assesses the management quality and corporate social performance of firms supervised according to three distinctly different governance regimes. The differences relate to protocols and interventions on board gender balance. Sweden and Norway serve as our strongly gender-inclusive (SGI) benchmarks, with the UK and China as our respective moderately (MGI) and weakly gender-inclusive (WGI) domains. Our evidence shows that corporate social performance ratings have risen appreciably between 2010 and 2015 in each of China, the UK, Sweden and Norway. Moreover, corporate social responsibility (CSR) ratings in Sweden, Norway and the UK appear broadly comparable. In extending Ahern and Dittmar’s (Quarterly Journal of Economics, 127, 137–197, 2012) evidence of a quota’s initial deleterious effect on managerial quality, we observe improvement in Norwegian firms’ directors’ educational profiles as quotas become more entrenched. Average director age (experience) also rose in such firms over the study period. Our results suggest some degree of adaptation in the application of board quotas. Additionally, variation in female board participation exerts minimal (strong) influence on CSR ratings for SGI- (MGI- & WGI-) domain entities. Findings on this issue for China and the UK strongly support a critical mass theory (CMT; Konrad, Kramer, & Erkut, Organizational Dynamics, 37(2), 145–164, 2008) conception of corporate social-engagement. Finally, results reveal a non-uniform relation between corporate social and financial returns. Overall, we add new context to institutional theory narratives on stakeholder-engagement (Campbell, Academy of Management Review, 32(3), 946–967, 2007; Young & Makhija, Journal of International Business Studies, 45, 670–698, 2014).

Water management and corporate social performance in the food and beverage industry

Abstract The food and beverage industry is one of the most water intensive industries. Therefore, an effective and efficient water management, based on eco-system related indicators, is crucial. This study analyzes the connection between indicators that address sustainable water management as a subgroup of ecosystem management and the general corporate social performance of firms. The study explores which water eco-system indicators are used in the food and beverage industry to assess corporate water risk management. Secondly, we analyzed the relationship between corporate water risk management and overall corporate social performance. Based on an analysis of 61 firms in the food and beverage sector, our results suggest that the most used indicators were Operations' Dependency on Freshwater, Change in Water Supply, Use of Water in the Facilities, Collaboration with Communities, and Water Risks for Agricultural Inputs. Indicators addressing an insideout perspective, such as Impacts on Communities were less often used. Furthermore, we found that the firms' general corporate social performance, measured by MSCI KLD-ESG indicators, is a good predictor for their use of water indicators. We conclude that the firms in the sample follow an outside-in approach for their water management activities and that water management is a significant part of corporate social responsibility activities in the sector because the business performance of food and beverage firms is interwoven with their water management activities.

Antecedents of corporate social performance: the effects of task environment managerial discretion

PurposeThe purpose of this research is to better understand how industry conditions affect corporate social performance (CSP). To accomplish this objective, the authors develop and test a theoretical argument that task environment managerial discretion plays an important role in determining a firm’s level of CSP.Design/methodology/approachIn this research, the authors utilize a longitudinal data set of archival data nested across year, firm and industry. They then test their research model using multilevel techniques, which account for the nested nature of their research design.FindingsFirms exhibit higher levels of CSP when their industry’s environment is high in dynamism and product differentiation. Conversely, firms exhibit lower levels of CSP when capital intensity is high. Finally, the authors find that firms exhibit higher levels of both positive and negative CSP as industry munificence increases.Research limitations/implicationsA number of researchers have called for investigation into the antecedents of CSP. This research provides an important next step in understanding the factors that influence firm CSP. Specifically, this research illustrates how the task environment affects stakeholder management by influencing the degree to which firms engage in CSP.Practical implicationsManagers should be mindful of the task environment’s conditions for managerial discretion and how these conditions affect stakeholder support for CSP. Moreover, managers should understand how industry conditions affect the firm’s ability to achieve competitive advantage through the use of CSP strategies.Originality/valueWhile there has been much research aimed at understanding the potential CSP-firm performance link, there has been relatively little attention paid to understanding what influences firm CSP in the first place. This research suggests that industry-level characteristics of managerial discretion strongly influence firm strategic actions toward social performance.

Corporate Social Responsibility and Gender Diversity: Insights from Asia Pacific

AbstractA growing body of empirical evidence suggests a positive link between boardroom gender diversity and corporate social responsibility (CSR) performance in developed economy firms. However, there is a paucity of evidence regarding whether this relationship holds true for developing economy firms. Relying on stakeholder and institutional theory, this study examines for a positive link between board gender diversity and enhanced corporate social performance of firms across three Asia Pacific emerging economies (Malaysia, Pakistan, and Thailand). We find a significant relationship between board gender diversity and enhanced adoption of CSR in these emerging markets. Given that emerging societies and their environments are often the most vulnerable to unethical corporate practices, our finding that female directors can play a strategic role in enabling firms to ethically manage their social responsibilities and sustainable practices has important policy implications for regulators and stakeholders. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

A Stakeholder–Human Capital Perspective on the Link between Social Performance and Executive Compensation

ABSTRACT:The link between firm corporate social performance (CSP) and executive compensation could be driven by a sorting effect (a firm’s CSP is related to the initial levels of compensation of newly hired executives), or by an incentive effect (incumbent executives are rewarded for past firm CSP). Existing empirical work focuses exclusively on the incentive effect. In contrast, in this paper we explore the sorting effect of firm CSP on the initial compensation of newly hired executives. In doing so, we develop a novel theoretical approach based on an integration of stakeholder theory and human capital theory, suggesting a positive association between the initial compensation of executives and firm CSP strengths and concerns. It also suggests that the strength of this relationship varies between different executive roles (as a function of stakeholder-management responsibilities). We find support for this theoretical framework in a large sample of newly-hired executives employed by Standard & Poor 1500 firms.

The relationship between corporate diversification and corporate social performance

Does diversification affect firm response to stakeholder demands and social issues? Despite extensive interest in corporate diversification in the strategy literature, the relationship between diversification and corporate social performance (CSP) remains largely unexplored. In this study, I propose that the level of diversification will be positively related to the CSP of firms. However, when diversified firms have a strong focus on short‐term profit, it may discourage firm response to stakeholder demands and investment in social issues, thereby negatively moderating the positive relationship between the level of diversification and CSP. Empirical testing on a sample of U.S. firms generally supports my predictions. Copyright © 2012 John Wiley & Sons, Ltd.

Measuring Corporate Social Performance: An Efficiency Perspective

Aggregation of corporate social performance (CSP) metrics poses a major challenge to researchers and practitioners. This study provides a critical evaluation of current aggregation approaches and proposes a new methodology based on data envelopment analysis (DEA) to compute a CSP index. DEA is independent of subjective weight specifications and provides an efficiency index to benchmark the CSP of firms. Using CSP data from 2190 firms in three major industries from the Kinder, Lydenberg, and Domini, Inc. database in 2007, our study presents the first application of the DEA model for CSP and ordinal data and opens up a new path for future empirical CSP research.

The Effects of CEO Pay Structure on Corporate Social Performance

Corporate social performance (CSP) is increasingly viewed as an important business outcome by researchers, investors, and society as a whole. Furthermore, empirical research indicates that CSP is positively related to corporate financial performance. These considerations lead to the question of whether CEO pay is properly structured to provide incentive to the CEO to improve firm CSP. In a sample of 313 firms, the authors found that a short-term CEO pay focus was negatively related to CSP, whereas a long-term focus was positively related to CSP. Implications of these results for future research and CEO pay design are presented.

Studying the Effects of Actual Knowledge of a Firm's Corporate Social Performance on Organizational Reputation and Attractiveness

Studying the Effects of Actual Knowledge of a Firm's Corporate Social Performance on Organizational Reputation and Attractiveness