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Responsible corporate governance: Towards a stakeholder board of directors?

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  • Ayuso, Silvia

    (IESE Business School)

  • Argandoña, Antonio

    (IESE Business School)

Abstract

The central question posed in this paper will be how to organize board composition in order to ensure responsible corporate governance both from a CSR and a good governance perspective. Adopting a stakeholder approach to corporate governance, we analyze the arguments given by different theoretical approaches for linking specific board composition with financial performance and CSR, and discuss the empirical research conducted. Despite the inconclusive findings of empirical research, it can be argued that diverse stakeholders on the board will promote CSR activities of the firm, but at the same time will increase board capital (which ultimately may lead to a better financial performance). Finally, we propose a model for selecting board members based both on ethical and pragmatic arguments.

Suggested Citation

  • Ayuso, Silvia & Argandoña, Antonio, 2007. "Responsible corporate governance: Towards a stakeholder board of directors?," IESE Research Papers D/701, IESE Business School.
    • Handle: RePEc:ebg:iesewp:d-0701
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    2. Emma García-Meca & María-Victoria Uribe-Bohórquez & Beatriz Cuadrado-Ballesteros, 2018. "Culture, Board Composition and Corporate Social Reporting in the Banking Sector," Administrative Sciences, MDPI, vol. 8(3), pages 1-23, July.
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    4. Ismail Khan & Imran Khan & Bilal bin Saeed, 2019. "Does board diversity affect quality of corporate social responsibility disclosure? Evidence from Pakistan," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(6), pages 1371-1381, November.
    5. Cuadrado-Ballesteros, Beatriz & Rodríguez-Ariza, Lázaro & García-Sánchez, Isabel-María, 2015. "The role of independent directors at family firms in relation to corporate social responsibility disclosures," International Business Review, Elsevier, vol. 24(5), pages 890-901.
    6. Chung, Huimin & Lin, Jane Raung & Yang, Ying Sui, 2012. "How do entrenched managers handle stakeholders interests?," Journal of Multinational Financial Management, Elsevier, vol. 22(5), pages 263-277.
    7. Md Sajjad Hosain, 2020. "The Relationship Between Corporate Governance and Corporate Social Responsibility Expenditure in Bangladesh: Moderating Role of Firm Value," Indian Journal of Corporate Governance, , vol. 13(2), pages 190-209, December.
    8. Eduardo Ortas & Igor Álvarez & Eugenio Zubeltzu, 2017. "Firms’ Board Independence and Corporate Social Performance: A Meta-Analysis," Sustainability, MDPI, vol. 9(6), pages 1-26, June.
    9. Ahmad Yuosef Alodat & Zalailah Salleh & Haitham Nobanee & Hafiza Aishah Hashim, 2023. "Board gender diversity and firm performance: The mediating role of sustainability disclosure," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 2053-2065, July.
    10. Dulacha Barako & Alistair Brown, 2008. "Corporate social reporting and board representation: evidence from the Kenyan banking sector," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 12(4), pages 309-324, November.
    11. Luca Gnan & Alessandro Hinna & Fabio Monteduro & Danila Scarozza, 2013. "Corporate governance and management practices: stakeholder involvement, quality and sustainability tools adoption," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(4), pages 907-937, November.
    12. M. A. Gulzar & Jacob Cherian & Jinsoo Hwang & Yushi Jiang & Muhammad Safdar Sial, 2019. "The Impact of Board Gender Diversity and Foreign Institutional Investors on the Corporate Social Responsibility (CSR) Engagement of Chinese Listed Companies," Sustainability, MDPI, vol. 11(2), pages 1-19, January.
    13. Cuadrado Ballesteros, Beatriz & García Rubio, Raquel & Martínez Ferrero, Jennifer, 2015. "Efecto de la composición del consejo de administración en las prácticas de responsabilidad social corporativa," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 18(1), pages 20-31.
    14. Francesco Paolone & Matteo Pozzoli & Nicola Cucari & Rosario Bianco, 2023. "Longer board tenure and audit committee tenure. How do they impact environmental performance? A European study," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 358-368, January.
    15. Dalilawati Zainal & Norhayah Zulkifli & Zakiah Saleh, 2013. "Corporate Board Diversity in Malaysia: A Longitudinal Analysis of Gender and Nationality Diversity," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(1), pages 136-148, January.
    16. José Ángel Moreno Izquierdo, 2019. "De la empresa accionarial a la empresa participativa," Revista de Economía Crítica, Asociación de Economía Crítica, vol. 28, pages 55-68.
    17. Mehmoona Sharif & Kashif Rashid, 2014. "Corporate governance and corporate social responsibility (CSR) reporting: an empirical evidence from commercial banks (CB) of Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2501-2521, September.
    18. Marie Pavlakova Docekalova & Alena Kocmanova & Jiri Kolenak, 2015. "Development of Corporate Governance Performance Indicators for Czech Manufacturing Companies," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 1, pages 57-72, March.
    19. Heather R. Dixon-Fowler & Alan E. Ellstrand & Jonathan L. Johnson, 2017. "The Role of Board Environmental Committees in Corporate Environmental Performance," Journal of Business Ethics, Springer, vol. 140(3), pages 423-438, February.
    20. Isabel‐María García‐Sánchez & Jennifer Martínez‐Ferrero & Emma García‐Meca, 2018. "Board of Directors and CSR in Banking: The Moderating Role of Bank Regulation and Investor Protection Strength," Australian Accounting Review, CPA Australia, vol. 28(3), pages 428-445, September.
    21. Francesca Gennari & Daniela M. Salvioni, 2019. "CSR committees on boards: the impact of the external country level factors," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(3), pages 759-785, September.
    22. Nooraisah Katmon & Zam Zuriyati Mohamad & Norlia Mat Norwani & Omar Al Farooque, 2019. "Comprehensive Board Diversity and Quality of Corporate Social Responsibility Disclosure: Evidence from an Emerging Market," Journal of Business Ethics, Springer, vol. 157(2), pages 447-481, June.
    23. Hazar Ben Barka & Sarah Mokaddem, 2012. "Nature of the Director's profile and Knowledge Transfer in Corporate Social Responsibility: A Literature-based Approach," Post-Print hal-00692350, HAL.
    24. Samaha, Khaled & Khlif, Hichem & Hussainey, Khaled, 2015. "The impact of board and audit committee characteristics on voluntary disclosure: A meta-analysis," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 24(C), pages 13-28.

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    Keywords

    Board composition; corporate governance; corporate social responsibility; financial performance; stakeholders;
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