Director tenure and corporate social responsibility: The tradeoff between experience and independence

This paper examines the impact of director tenure on firms' performance on their corporate social responsibilities (CSR). We find that independent director tenure and the firm's corporate social performance are non-linearly associated in the cross-section, with performance increasing at the short end of tenure and decreasing at the long end. We find that the result is robust to endogeneity tests that estimate tenure in residual form, use an instrumental variable approach and examine the relationship using leading measures of CSR performance. Insider director tenure, on the other hand, does not have an impact on CSR performance. The results suggest that the impact of independent director tenure on firms' CSR performance is a balance between the accumulation of firm-specific knowledge that occurs with longer tenure, and the accompanying potential loss of director independence.