Journal of Business Ethics

, Volume 118, Issue 1, pp 171–187

How Do Board Size and Occupational Background of Directors Influence Social Performance in For-profit and Non-profit Organizations? Evidence from California Hospitals

Article

DOI: 10.1007/s10551-012-1578-x

Cite this article as:
Bai, G. J Bus Ethics (2013) 118: 171. doi:10.1007/s10551-012-1578-x

Abstract

This study investigates how board size and occupational background of directors differentially influence social performance in for-profit and non-profit organizations. Using data from California hospitals, we develop a quantitative measure of social performance and provide the following empirical evidence. First, board size is negatively (positively) associated with social performance in for-profit (non-profit) hospitals. Second, the presence of government officials on the board is negatively (positively) related to social performance in for-profit (non-profit) hospitals. Third, representation of physicians on the board is positively associated with social performance in for-profit hospitals, whereas their presence is not significantly related to social performance in non-profit hospitals. Our findings highlight the different effects of governance mechanisms on social performance in for-profit and non-profit organizations.

Keywords

Board sizeGovernanceOccupational backgroundOwnershipSocial performance

Copyright information

© Springer Science+Business Media Dordrecht 2012

Authors and Affiliations

  1. 1.Department of Accounting, Williams School of Commerce, Economics and PoliticsWashington & Lee UniversityLexingtonUSA