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Board Diversity and Corporate Social Responsibility

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  • Maretno Harjoto
  • Indrarini Laksmana
  • Robert Lee

Abstract

This study examines the impact of board diversity on firms’ corporate social responsibility (CSR) performance. Using seven different measures of board diversity across 1,489 U.S. firms from 1999 to 2011, the study finds that board diversity is positively associated with CSR performance. Board diversity is associated with a greater number of areas in which CSR is strong and a fewer number of areas in which CSR is a concern. These findings support the stakeholder theory and are consistent with the view that board diversity enhances firms’ ability to satisfy the needs of their broader groups of stakeholders. We find that gender, tenure, and expertise diversities seem to be the driving factors of firms’ CSR activities. Furthermore, we find that board diversity significantly increases CSR performance by increasing CSR strengths and reducing CSR concerns for firms producing consumer-oriented products and firms operating in more competitive industries. Our results remain robust using different measures of CSR performance, different estimation methods, and different samples. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Maretno Harjoto & Indrarini Laksmana & Robert Lee, 2015. "Board Diversity and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 132(4), pages 641-660, December.
    • Handle: RePEc:kap:jbuset:v:132:y:2015:i:4:p:641-660
    DOI: 10.1007/s10551-014-2343-0
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    More about this item

    Keywords

    Diversity; Corporate social responsibility; Board of Directors; Stakeholders; M14; G34; G39;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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