Corporate Governance Social Responsibility Research Articles

CSR and ownership structure: Moderating role of board characteristics in an emerging country context

AbstractThe existing literature on the impact of ownership structure on corporate social responsibility (CSR) showed inconsistent results and disregarded the possibility of non‐linear patterns in the relationship. The present study examines the non‐linear relationship between ownership structure (family, foreign, institutional, and government) and CSR expenditure of listed non‐financial service sector firms in India. Further, the moderating effect of board variables, including board size, board independence, multiple directorships and gender diversity, is explored in the ownership structure‐CSR nexus. Based on a balanced panel dataset of 243 non‐financial service sector companies listed in India, the study observed an inverse U‐relationship between institutional ownership and CSR. The study also found that family, foreign, and government ownership positively influence the firm's social engagement. However, the study could find partial support for the moderating role of the four board characteristics; board size, board independence, multiple directorships and gender diversity in ownership‐CSR association. The study contributes to existing CSR and corporate governance literature by exploring one of the major factors (ownership structure) impacting CSR and the role of board variables in the association.

Governance of The Corporate Social Responsibility (CSR) Program of Karang Mukti Village in The Development of Embung Batu Beureum Tourism

This reseach aims to analyze the governance of Corporate Social Responsibility (CSR) programs implemented in Karang Mukti Village in the context of Embung Batu Beureum tourism development. Embung Batu Beureum Tourism is one of the important assets of the village in increasing community income, as well as preserving nature and local culture. CSR has a crucial role in supporting the success of this tourism development program. The methodology of this research uses a qualitative approach, with data collection through in-depth interviews, field observations, and document analysis related to CSR that has been carried out in Karang Mukti Village. The results showed that the governance of CSR programs in Karang Mukti Village has played an important role in supporting the development of Embung Batu Beureum tourism. Karang Mukti Village routinely monitors and evaluates CSR programs that have been implemented. This allows continuous improvement and adjustment of the program according to the needs of the community and tourism developments.

Millennials’ CSR Adoption: A Stakeholder Approach and the Impact on Profit

Business education emphasizes an analytical approach to decision making and strategy development. However, certain factors, such as Corporate Social Responsibility (CSR), are challenging to quantify in corporate strategy. The consideration of CSR, including Environmental, Social, and Corporate Governance, by Boards of Directors, is among these difficult-to-quantify factors. Business schools now teach students to focus more on a CSR/stakeholder approach, in line with updated standards such as Advance Collegiate Schools of Business Standard 9, which has increased the focus on societal impact in curricula. The CSR/stakeholder approach has emerged as a global strategic management option but is not without challenges, including non-homogeneous CSR issues and potential greenwashing. Moreover, a measurable stakeholder approach might lead to decreased profitability. Individual differences, particularly among millennials, influence support for or against CSR initiatives. This paper evaluates these differences and their impact on decision-making, which will significantly influence society as millennials rise to leadership roles.

Does corporate social responsibility increase innovation? Evidence from France

The current paper examines how corporate social responsibility (CSR) through three dimensions (social, environmental and governance) could influence technological and non‐technological innovations. The study is conducted on a longitudinal dataset of firms listed on the SBF1201 index between 2005 and 2016. It shows significant associations between CSR performance, particularly social and governance performances, and technological innovations introducing new products. The implementation of new processes is positively and significantly associated with environmental performance. Findings highlight that the three CSR dimensions have significant effects on management innovations. However, they did not influence marketing innovations. Finally, undertaking socially responsible projects does not drive significant changes in R&D strategy, specifically R&D expenditures and the number of hired scientists and experts, but it increases significantly the number of patents.

Does Ownership Influence Corporate Social Responsibility (CSR)? A Study Of Post-Csr Law Implementation In India

Objective: This study examines the influence of different ownership structures on corporate social responsibility spending in a mandatory CSR regime. Method: We use the CSR data under statutory mandate reported by the top 500 publicly listed Indian firms of the first four years after CSR law implementation in 2014 on Bombay Stock Exchange and the Ministry of Corporate Affairs website. Using institutional and agency theory arguments, we hypothesize that ownership structure influences CSR spending. We use multiple logistics regression for our statistical analyses. Results: In line with our prediction, our results reveal that different ownership structures influence the variation in CSR spending. Foreign firms spend on CSR at par with the statutory mandate. Government firms spend above the statutory mandate, and promoter-owned firms spend below the statutory mandate. Conclusion: Through CSR spending on social development initiatives, firms can contribute to the United Nations' sustainable development goals (SDGs) and build their credibility among stakeholders. Our study explains the influence of different ownership structures on CSR spending in a mandatory CSR regime. This study can help policymakers revisit the CSR law provisions by understanding why some firms are spending more and why some firms are spending less on CSR and encourage firms to spend more on CSR initiatives. We leverage institutional and agency theory to explain our findings.

The role of firm-level CSR governance characteristics as a driver of comprehensive CSR reporting – the moderating role of profitability

PurposeThis study aims to examine the impact of firm-level corporate social responsibility (CSR) governance characteristics on the extent, quality and comprehensiveness of CSR reporting of Pakistani listed enterprises.Design/methodology/approachThis study used content analysis of corporate annual reports and stand-alone CSR reports available on corporate websites in 2021 to identify CSR-related governance features and to calculate CSR reporting scores. Multivariate regression is used to test relationships. In addition, the analysis tested the moderating role of profitability in these relationships.FindingsFirm-level CSR governance characteristics contribute to the extent, quality and comprehensiveness of CSR reporting in a developing country. Further, results confirm that profitability moderates the relationship between CSR governance and the extent and comprehensiveness of CSR reporting.Research limitations/implicationsThis study employed cross-sectional data and focused on a single developing country. Future studies might include a cross-national sample and longitudinal data to demonstrate the broader relevance of these findings. The outcomes of this study are restricted to CSR disclosures based on CSR reports and annual reports. Future research may examine additional corporate communication channels, such as websites and social media platforms.Practical implicationsThis research validates the important role of CSR governance mechanisms as a driver of comprehensive CSR reporting. Business leaders and policymakers can facilitate improved corporate reporting by requiring companies to implement CSR-related governance mechanisms.Originality/valueThis is the first study to test the influence of firm-level CSR governance mechanisms in promoting the quantity, quality and comprehensiveness of CSR reporting in a developing country.

Analysis of Social Responsibility and its Relationship with the Financial Performance of Companies Located in Countries with Emerging Economies

Objective: The objective of this research was to analyze the relationship between Corporate Social Responsibility and companies' financial performance, from the perspective of ESG scores. Theoretical framework: Corporate social responsibility (CSR) and social and financial performance were conceptualized. The Legitimacy Theory consolidates CSR as a social contract, established between the company and society through actions that will be evaluated by their development and the results disclosed (Guthrie & Parker, 1989). Corporate social performance (DSC) represents the way in which the company meets and responds to the demands of social content, generating collective results (Boaventura, Silva & Bandeira-de-Melo, 2012). Method: Explanatory, documentary and quantitative research with a sample composed of companies that are part of the BRICS and that made ESG scores available, from 2018 to 2022, through Thomson Reuters Eikon®. Results and conclusion: The results confirm that there is a positive and significant relationship only for market performance when analyzing the RSCENV variable (CSR Environmental). The variable RSCGOV (CSR Governance) presented a non-significant result. Research implications: The results show that the hypothesis tested that corporate social responsibility strategies have a positive relationship with financial performance was disregarded by the research data. Originality/value: This study contributes to deepening the discussion about the impact of Corporate Social Responsibility practices on the performance of organizations, specifically aiming to contribute to the analysis of the impact of different aspects of sustainability (Environmental, Social and Governance) on operational and market performance.

Corporate Social Responsibility in India: An Examination in the Context of Corporate Governance

Abstract: Corporate Social Responsibility (CSR) has emerged as a significant aspect of corporate behavior globally, driven by ethical concerns, stakeholder expectations, and regulatory mandates. In India, the integration of CSR into corporate governance practices has garnered increasing attention in recent years. This abstract provides an overview of the examination of CSR in India within the framework of corporate governance. This study aims to explore the intricate relationship between CSR and corporate governance in the Indian context. It delves into the evolving landscape of CSR in India, particularly since the enactment of the Companies Act, 2013, which made it mandatory for certain qualifying companies to allocate a portion of their profits towards CSR activities. The analysis encompasses a review of legislative developments, the evolution of CSR reporting, and the role of stakeholders in shaping CSR strategies.

Shaping corporate social responsibility standards in the global economy: Chinese industry guidelines for responsible mineral supply chains

Between 2014 and 2023, the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (known by its acronym CCCMC) developed a set of corporate social responsibility guidelines which aim to steer Chinese outward mining investment toward a socially responsible model. This article presents an in-depth analysis of these voluntary industry-specific corporate social responsibility guidelines. The article also unfolds the less visible processes in which a Chinese industry association proactively engages with the dynamics of multi-level governance of corporate social responsibility in global mineral supply chains. While focusing on the rising role of the CCCMC, the article takes a ‘multi-level and actor-centred’ approach to understand the development of corporate social responsibility standards in the global economy. The article finds that CCCMC guidelines are inspired by and infused with pre-existing corporate social responsibility standards, especially international standards. Furthermore, it showcases the CCCMC’s continuing follow-up measures to implement the guidelines and increase recognition from other actors in global mineral supply chains. In particular, the article finds that the CCCMC has taken substantive measures to formulate and implement applicable labour standards in global mineral supply chains.

Whether corporate social responsibility is used to suppress earnings management practices and could corporate governance mechanisms prevent them? An empirical study

PurposeThis study examines whether managers adopt corporate social responsibility (CSR) disclosures to suppress earnings management practices and whether corporate governance mechanisms could limit such practices.Design/methodology/approachA quantitative approach was followed, in which secondary data from listed firms from 2014 to 2019 were gathered. Descriptive statistics and inferential techniques were performed, which included correlation, ordered logistic regression and 2SLS panel regression analyses.FindingsThe findings indicate that firms use CSR disclosure to conceal managers' opportunistic behaviour via earnings management as an entrenchment strategy and that corporate governance mechanisms could significantly constrain such behaviour.Research limitations/implicationsThis study goes beyond the conventional agency theory by incorporating additional theoretical perspectives from stakeholder and legitimacy theories, resulting in a multi-theoretical perspective in conceptualizing the study.Practical implicationsThe findings are expected to have significant policy implications, especially in limiting the opportunistic use of CSR disclosures and reducing earnings management practices to safeguard stakeholders' interests and ensure the sustainability of business entities.Originality/valueThe levels of CSR and board governance practices are captured using comprehensive indices. Moreover, earnings management was operationalized using both accrual-based and real earnings management proxies. Furthermore, while addressing an empirical dearth noted, the findings provide significant policy implications for limiting managers' opportunistic and unethical use of CSR disclosures with corporate governance mechanisms.

Under rising environmental uncertainty Chinese enterprises pursue fame or profits? Evidence from corporate social responsibility and financial investment

PurposeThe purpose of this study is to evaluate the impact of environmental uncertainty on corporate social responsibility (CSR), and involves corporate financial investment as mediating factor into this relationship to identify whether Chinese enterprises pursue fame or profit under rising environmental uncertainty.Design/methodology/approachData of listed companies in China from 2010 to 2019 are employed. Fixed effect and mediating effect models were used to explore the relationship between environmental uncertainty, corporate financial investment, and CSR. The heterogeneity influence and moderating effect are discussed by using the method of grouping test and adding interactive items.FindingsThe study finds that rising environmental uncertainty has a negative impact on CSR. It stimulates managements' short-sighted motivation, so that enterprises prioritize financial investment that can solve short-term goals, rather than CSR performance. This inhibitory effect is caused by holding illiquid financial assets with the motivation of “speculative profit seeking.” The negative effect is greater in the samples of state-owned enterprises, nonfamily enterprises and enterprises with low risk-taking.Practical implicationsIt provides a decision-making direction for implementation of CSR governance and the construction of CSR system, particularly in emerging market economies.Social implicationsCSR is widely known in developed countries for its formation, development and role, but its effectiveness and behavioral motivation are less mentioned in emerging markets. In the future, the research in this area needs to be further advanced.Originality/valueThe study makes significant contributions to the mechanisms behind the link between environmental uncertainty and CSR by taking corporate financial investment as an intermediary factor into the analysis, especially in the unique market context of China.

Emergence of Hybrid CSR Models as a Conflict‐Driven Communicative Process in a Nordic Welfare State

AbstractThis paper offers an understanding of how hybrid models of corporate social responsibility (CSR) – models combining society‐centric mandatory (implicit) and business‐centric voluntary (explicit) approaches to CSR – are communicatively constructed through institutional struggles over the roles and responsibilities of business in society, in the context of a Nordic welfare state. We develop a model of hybridization as a dialectical process of communicative activity, framing and counter‐framing, in which conflict and contestation over normative understandings about CSR drive the process. The model explains the emergence of hybrid models of CSR in terms of gradually evolving issue development and frame changes that are driven by discursive struggles over moral obligations of business in society, appropriate configuration of legitimacy relationships, and appropriate institutional arrangements for CSR governance. In contrast to prevailing accounts, which tend to theorize hybridization as resulting from isomorphic, mimetic, and normative pressures, our account explicitly attends to the politics of hybridization.

The Effect of Corporate Social Responsibility (CSR), Institutional Ownership, Leverage, And Firm Size on Financial Performance

Financial performance is a determining indicator of the sustainability of the firm. To run according to the goals, companies need to analyze factors that can affect financial performance, such as social responsibility, corporate governance, leverage, and firm size. Through CSR and serious corporate governance, it can improve financial performance. This study examines the influence of CSR, Institutional Ownership, Leverage, Firm Size, and the role of Earning Management on the Financial Performance (ROE) of manufacturing companies listed on the IDX in 2017-2021. The test results using SPSS 23 found that CSR, Institutional Ownership, Leverage, and Firm Size affected financial performance, earning management moderates the relationship between CSR and financial performance

Understanding the dynamics of capital structure, corporate governance, and corporate social responsibility in high- and low-leveraged US and Chinese firms.

Corporate social responsibility turned into a global sensation from the inception of the twenty-first century in the corporate world and grabbed immense engrossment from all stakeholders in their decision-making process. Capital structure and corporate governance practices are the well-mellowed facets of corporate finance literature. In this study, the moderating role of corporate social responsibility (CSR) between corporate governance and leverage of the US and Chinese listed firms has been established, with a further extension of analyzing the moderating role of CSR between corporate governance and leverage in high vs low leveraged firms and high CSR vs low CSR firms as the novelty of this study and has never been examined in both economies and globally. The data of 1989 Chinese-listed firms from 28 sectors of the economy and 6640 US-listed firms from 27 sectors of the economy has been taken from 2001 to 2019 and analyzed through fixed effect regression and system generalized method of moment (GMM). Results of the study reveal that CSR and corporate governance are negatively associated with the leverage of both Chinese and US firms. Moreover, the moderating role of CSR has established between corporate governance and leverage negative relationship. The moderating role of CSR in the relationship of leverage and corporate governance is established only in low-leveraged firms whereas it is insignificant in high-leveraged firms. System GMM confirms the signs and significance of the regression results; that is why regression results are robust and reliable, and there is no endogeneity problem in our model. The study also gives an insight for future research on high- and low-leveraged firms and firms with more CSR score than less CSR score with other dimensions such as firm performance and firm value variables.

How and When Does Mandatory CSR Disclosure Affects Firms’ CSR Disclosure Strategy?

ABSTRACTResearch on corporate social responsibility (CSR) disclosure recognizes the importance of the government and examines how firms respond to government CSR regulations. However, little attention is given to how government regulations affect firms’ disclosure strategy in multiple fields of CSR. Based on institutional theory, this study proposes that mandatory CSR disclosure increases the legitimacy management cost for firms, and thus firms disclose more CSR scope to gain legitimacy and less CSR emphasis to reduce costs. Using data from Chinese A-share listed firms in 2008–2018, this study finds that mandatory CSR disclosure is positively related to CSR scope but negatively related to CSR emphasis. In addition, firm visibility strengthens the aforementioned positive and negative relations, whereas market competition weakens the relation between mandatory CSR disclosure and CSR emphasis. This study contributes to the literature on CSR disclosure and studies on organizational responses to the government mandate.

Corporate social responsibility, financing constraints, and corporate carbon intensity: new evidence from listed Chinese companies.

Corporate social responsibility (CSR) is becoming increasingly important in the field of corporate sustainability. However, little literature has focused on the relationship between CSR and corporate carbon emissions in developing countries. This paper aims to fill this gap by exploring the relationship between CSR and corporate carbon intensity from the perspective of financing constraints. We examine the mediating effects of financing constraints using a mediating effects model by using Chinese listed companies data from 2011 to 2019. The analysis results of this paper are as follows: (1) CSR can reduce corporate carbon intensity. (2) Financing constraints have a positive mediating role between the two. Namely, CSR can reduce the financing difficulties of enterprises, and enhance carbon-neutral capacity. (3) The carbon emission reduction effect of CSR is different in different life cycles. (4) CSR has a greater impact on the carbon intensity of state-owned enterprises, high-tech enterprises, and heavy polluting enterprises. These facts provide meaningful references for developing countries such as China to promote CSR and carbon governance.

Impact of corporate social responsibility and corporate governance on the performance of nonfinancial companies

This research paper focuses on the growing importance of corporate social responsibility (CSR) in the business world, particularly in the Gulf Cooperation Council (GCC) region. The main aim is to bridge the gap by assessing the impact of CSR and corporate governance on financial performance. Ultimately, this paper emphasizes the strategic importance of CSR for improving financial performance and promoting trustworthiness and public image. This paper applied the ordinary least squares (OLS) and panel regressions (fixed and random) to investigate the impact of CSR, board size, independent directors, company size, and leverage as independent variables on the financial performance as the dependent variable (return on assets — ROA). The data were collected from Refinitiv Eikon platform for 210 listed nonfinancial companies for the last ten years (2013–2022). The results suggested that the higher the company’s involvement in CSR, the more the number of board members and the more independent directors the higher the performance. In addition, the higher the leverage in the GCC the less is the profitability of firms. Finally, the larger the company the better is the performance. Such results imply that more board of directors should be hired and increase compliance with the CSR principles to achieve better performance.

Corporate Social Responsibility, Benefits beyond Legitimacy: A Symbiotic Framework

The 21st-century social and political environment has continued to evolve and heightens the demand for organisations to provide accountability for the sustainability operations of their businesses. Accordingly, organisations are committing to diverse strategic efforts to provide disclosures on their social and environmental actions to the society and environment where they operate. Corporate social responsibility (CSR) has received support and criticism since its emergence in the corporate realm. This paper aims to portray CSR as beyond mere symbolic legitimacy and propose a corporate-society symbiotic existential framework. The research approach is a critical literature analysis and conceptual framework development. The results show that the corporate and the society co-exist in a reciprocal relationship. Thus, the implication is that some CSR may be more than symbolic legitimacy with potential benefits derivable from committed transparent and pragmatic CSR, which can encourage companies to shift away from symbolic CSR tendencies. The paper recommends the need for organisations to operationalise CSR practices and policy as this has a propensity to enhance corporate legitimate standing, which will assist in reducing business risks and enhance the potential for profit in the long run. In addition, this discourse may be helpful for business schools in their academic studies about CSR and legitimacy theory and would also assist in CSR regulatory initiatives. The value of the paper hinges on the proposed novel framework for corporate-society symbiotic existence, which provides an agenda for future research study and expansion therein. This framework may lead to multiples of modelling in future CSR and corporate governance studies and may also assist in narrowing the gap between legal and normative CSR.

A Conceptual Approach to Exploring Board Effect on CSR Responsiveness

Our aim is to design a conceptual model illustrating the impact of corporate boards on corporate social responsibility (CSR). Scholars and researchers from various disciplines have all pointed out the increasing importance of CSR as a corporate strategy, and the question of how to manage the corporate attention allocation to CSR issues has shown its values in the field of CSR and corporate governance. The paper first presents the argument of applying a four-category variable, CSR responsiveness, to measure CSR: non-action, symbolic action, compliance, and proactivity. We believe corporate boards influence CSR responsiveness both directly and indirectly. Directly, active board involvement in performing control, strategy, and service tasks could enhance CSR responsiveness. Indirectly, through board attention structures supported by the attention-based view, we have detailed the impact of the boards of directors on attention allocation. They include the characteristics of directors, the communication style of CSR issues, and external and internal environmental forces. We also discuss the implication of the model to conclude.

Mandatory CSR in India – A Trailblazer from the East

The paper attempts to trace the evolution of the concept of Corporate Social Responsibility (CSR) and seeks to gather how it turned out to be a boon for the developing nations of the world, particularly countries like India. By the path-breaking promulgation of the Companies Act, 2013, CSR was made mandatory in India, for companies meeting the financial thresholds mentioned in Section 135 of the Act. The author seeks to study the journey of CSR in India, the present law, and the latest amendments made to the same in recent times. The paper evaluates the rationale behind the mandatory CSR law and how it can be a game-changer in India Inc.’s commitment to social causes. The author has also suggested how the mandatory CSR regime in India can be further strengthened to contribute meaningfully, particularly in the fields of education and healthcare, through better project identification, stronger execution linkages, an overhaul of the board committees, flexible and pragmatic government rules, and synchronization of the corporate CSR activities with the lead programmes of the Government of India. These reinforcements can go a long way in making the CSR approach much more effective and value accretive.