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The relationship among board of director characteristics, corporate social performance and corporate financial performance

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  • Paul Dunn
  • Barbara Sainty

Abstract

Purpose - The purpose of this paper is to investigate the link between qualitative measures of a firm's Board of Directors and its corporate social performance (CSP). Design/methodology/approach - CSP is a function of qualitative measures of a firm's Board of Directors, as well as firm risk and financial performance. A longitudinal sample of 104 Canadian firms is used. Findings - Board independence is positively related to social performance but shareholder orientation is not. In addition, a positive relationship between social performance with both financial performance and debt is found. Research limitations/implications - Although the sample is small and restricted to Canadian firms, the results are quite robust. Future studies should consider using qualitative measures on a larger international sample of firms. Originality/value - This paper uses qualitative measures – the degree of independence of the Board and the Board's level of shareholder orientation – to examine the interrelationship between a firm's Board of Directors and its CSP.

Suggested Citation

  • Paul Dunn & Barbara Sainty, 2009. "The relationship among board of director characteristics, corporate social performance and corporate financial performance," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 5(4), pages 407-423, September.
    • Handle: RePEc:eme:ijmfpp:v:5:y:2009:i:4:p:407-423
    DOI: 10.1108/17439130910987558
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    References listed on IDEAS

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    Cited by:

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    2. Ferry Aditya, 2016. "Corporate Social Responsibility (CSR) Performance and Accrual Quality: Case study on Firms Listed on Indonesia Stock Exchange (IDX)," Business and Economic Research, Macrothink Institute, vol. 6(2), pages 51-64, December.
    3. Bhattacherjee, Purba & Mishra, Sibanjan, 2025. "Oil shocks and capital structure: Role of ESG across the globe," International Review of Economics & Finance, Elsevier, vol. 99(C).
    4. María Consuelo Pucheta‐Martínez & Isabel Gallego‐Álvarez & Inmaculada Bel‐Oms, 2019. "Board structures, liberal countries, and developed market economies. Do they matter in environmental reporting? An international outlook," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 710-723, July.
    5. Mehdi Nekhili & Amal Boukadhaba & Haithem Nagati, 2021. "The ESG–financial performance relationship: Does the type of employee board representation matter?," Corporate Governance: An International Review, Wiley Blackwell, vol. 29(2), pages 134-161, March.
    6. repec:ers:journl:v:vi:y:2018:i:3:p:47-79 is not listed on IDEAS
    7. Shamsuddeen Mamuda Ali & Muhammad Aminu Isa, 2018. "Firms Attributes and Corporate Social Responsibility Disclosure: A Literature Review," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 8(4), pages 312-324, April.
    8. Mohammed Abdullah Ammer & Meqbel Mishary Aliedan & Mansour Abdullah Alyahya, 2020. "Do Corporate Environmental Sustainability Practices Influence Firm Value? The Role of Independent Directors: Evidence from Saudi Arabia," Sustainability, MDPI, vol. 12(22), pages 1-21, November.
    9. 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.
    10. V.M. Morais Pereira & J.A. Candeias Bonito Filipe, 2018. "Quality of Board Members’ Training and Bank Financial Performance: Evidence from Portugal," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 47-79.
    11. P.K Haldar, 2015. "The Changing Facets of Corporate Governance and Corporate Social Responsibilities in India and their Interrelationship," Information Management and Business Review, AMH International, vol. 7(3), pages 6-16.
    12. Eugenio Zubeltzu‐Jaka & Igor Álvarez‐Etxeberria & Eduardo Ortas, 2020. "The effect of the size of the board of directors on corporate social performance: A meta‐analytic approach," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1361-1374, May.
    13. Nazim Hussain & Ugo Rigoni & René P. Orij, 2018. "Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance," Journal of Business Ethics, Springer, vol. 149(2), pages 411-432, May.
    14. Camélia Radu & Nadia Smaili, 2021. "Corporate performance patterns of Canadian listed firms: Balancing financial and corporate social responsibility outcomes," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 3344-3359, November.
    15. Uwalomwa Nil Uwuigbe & Ben-Caleb Egbide & Akanbi Moses Ayokunle, 2011. "The Effect of Board Size and Board Composition on Firms Corporate Environmental Disclosure: A Study of Selected Firms in Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 5(5), pages 164-176, October.
    16. Samuel Benjamin & Mansi Mansi & Rakesh Pandey, 2020. "Board gender composition, board independence and sustainable supply chain responsibility," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 3305-3339, December.
    17. Francesco Manta & Annunziata Tarulli & Domenico Morrone & Pierluigi Toma, 2020. "Toward a Quadruple Bottom Line: Social Disclosure and Financial Performance in the Banking Sector," Sustainability, MDPI, vol. 12(10), pages 1-18, May.
    18. Wajdi Ben Rejeb, 2015. "Impact des rôles et des caractéristiques du conseil d'administration sur le degré d'internationalisation des sociétés tunisiennes cotées," Post-Print hal-01226576, HAL.
    19. María del Mar Miras‐Rodríguez & Amalia Carrasco‐Gallego & Bernabé Escobar‐Pérez, 2015. "Are Socially Responsible Behaviors Paid Off Equally? A Cross‐cultural Analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(4), pages 237-256, July.
    20. Renata Konadu & Gabriel Sam Ahinful & Samuel Owusu-Agyei, 2021. "Corporate governance pillars and business sustainability: does stakeholder engagement matter?," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(3), pages 269-289, September.
    21. Vítor Pereira & José Filipe, 2014. "The Board’s Attributes and Their Influence in Company’s Performance. A Review over the Recent Literature," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 4(1), pages 691-691.

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