Abstract
While it is widely assumed that greater diversity in corporate governance will enhance a firm’s corporate social performance, this study considers an alternative thesis which relates managerial control to corporate philanthropy. The study empirically evaluates both board diversity and managerial control of the board as possible predictors of corporate philanthropy. The demonstration of a positive relationship between managerial control and corporate philanthropy contributes to our understanding that corporate social performance results from a complex set of economic and social motives. Possible future research and managerial implications are discussed.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Bilimoria, D. and S. K. Piderit: 1994, ‘Board Committee Membership: Effects of Sex-Based Bias’, Academy of Management Journal 37, 1453–1477.
Carroll, A. B.: 1996, Business and Society: Ethics and Stakeholder Management, 3rd edn. (South-Western College Publishing, Cincinnati, OH).
Cochran, P. L., R. A. Wood and T. B. Jones: 1985,’ The Composition of Boards of Directors and Incidence of Golden Parachutes’, Academy of Management Journal 28, 664–671.
Coffey, B. S. and G. E. Fryxell: 1991, ‘Institutional Ownership of Stock and Dimensions of Corporate Social Performance’, Journal of Business Ethics 10, 437–444.
Daily, C. M. and D. R. Dalton: 1994, ‘Bankruptcy and Corporate Governance: The Impact of Board Composition and Structure’, Academy of Management Journal 37, 1603–1617.
Davis, J. H.: 1969, Group Performance (Addison-Wesley, Reading, MA).
Drucker, P. E.: 1973, Management: Tasks, Responsibility, Practices (Harper and Row Publishers, New York).
Freeman, R. E.: 1984, Strategic Management: A Stakeholder Approach (Pitman Publishing, Boston).
Fry, L. W., G. D. Keim and R. R. Meiners: 1982, ‘Corporate Contributions: Altruistic or For Profit?’, Academy of Management Journal 25, 94–107.
Galaskiewicz, J.: 1985, Social Organization of an Urban Grants Economy: A Study of Business Philanthropy and Nonprofit Organizations (Academic Press, Orlando, FL).
Gaventa, J.: 1980, Power and Powerlessness: Quiescence and Rebellion in an Appalachian Valley (University of Illinois Press, Urbana, IL).
Janis, I. L.: 1972, Victims of Groupthink (Houghton-Mifflin, Boston).
Jensen, M. C. and W. H. Meckling: 1976, ‘Theory of the Firm: Managerial Behavior, Agency Cost and Ownership Structure’, Journal of Financial Economics 3, 305–360.
Johnson, E. W.: 1990, ‘An Insider's Call for Outside Direction’, Harvard Business Review 68, 46–55.
Kesner, I. F.: 1988, ‘Directors' Characteristics and Committee Membership: An Investigation of Type, Occupation, Tenure, and Gender’, Academy of Management Journal 31, 66–84.
Kesner, I. F., B. Victor and B. T. Lamont: 1986, ‘Board Composition and the Commission of Illegal Acts: An Investigation of Fortune 500 Companies’, Academy of Management Journal 29, 789–799.
Kosnik, R. D.: 1987, ‘Greenmail: A Study of Board Performance in Corporate Governance’, Administrative Science Quarterly 32, 163–185.
Lydenberg, S. D., A. T. Marlin and S. O. Strub: 1986, Rating America's Corporate Conscience (Addison-Wesley, Reading, MA).
Mace, M. L.: 1972, ‘The President and the Board of Directors’, Harvard Business Review 50, 37–49.
Marx, T. G.: 1985, Business and Society: Economic, Moral, and Political Foundations (Prentice-Hall, Englewood Cliffs, NJ).
McGuire, J. B., A. Sundgren and T. Schneeweis: 1988, ‘Corporate Social Responsibility and Firm Financial Performance’, Academy of Management Journal 31, 854–872.
McMillan, G. S.: 1996, ‘Corporate Social Investments: Do They Pay?’, Journal of Business Ethics 15, 309–314.
Mintzberg, H.: 1983, Power In and Around Organizations (Prentice-Hall, Englewood Cliffs, NJ).
Molz, R.: 1995, ‘The Theory of Pluralism in Corporate Governance: A Conceptual Framework and Empirical Test’, Journal of Business Ethics 14, 789–804.
Neff, T.: 1989, ‘Let Directors Be Directors’, Wall Street Journal (December 11), 14.
Pava, M. L. and J. Krausz: 1996, ‘The Association Between Corporate Social-Responsibility and Financial Performance: The Paradox of Social Cost’, Journal of Business Ethics 15, 321–357.
Pfeffer, J.: 1972, ‘Size and Composition of Corporate Boards of Directors: The Organization and Its Environment’, Administrative Science Quarterly 17, 218–228.
Schellhardt, T. D.: 1994, ‘More Directors are Recruited from Outside’, Wall Street Journal (March 20), B1.
Singh, H. and F. Harianto: 1989, ‘Management-Board Relationships, Takeover Risk, and the Adoption of Golden Parachutes’, Academy of Management Journal 32, 7–24.
Smith, H. W.: 1983, A Profile of Corporate Contributions (Council for Financial Aid to Education, New York).
Smith, C.: 1994, ‘The New Corporate Philanthropy’, Harvard Business Review (May-June), 105–116.
Ullmann, A.: 1985, ‘Data in Search of a Theory: A Critical Examination of the Relationships among Social Performance, Social Disclosure, and Economic Performance’, Academy of Management Review 10, 540–577.
Vance, S. C.: 1955, Functional Control and Corporate Performance in Large Scale Industrial Enterprises (The University of Massachusetts, Amherst, MA).
Vance, S. C.:1964, Boards of Directors: Structure and Performance (University of Oregon Press, Eugene, OR).
Wartick, S. L. and P. L. Cochran: 1985, ‘The Evolution of the Corporate Social Performance Model’, Academy of Management Review 10, 758– 769.
Wokutch, R. E. and B. A. Spencer: 1987, ‘Corporate Saints and Sinners: The Effects of Philanthropic and Illegal Activity on Organizational Performance’, California Management Review 29, 62–77.
Wood, D. J.: 1991, ‘Corporate Social Performance Revisited’, Academy of Management Review 16, 691–718.
Rights and permissions
About this article
Cite this article
Coffey, B.S., Wang, J. Board Diversity and Managerial Control as Predictors of Corporate Social Performance. Journal of Business Ethics 17, 1595–1603 (1998). https://doi.org/10.1023/A:1005748230228
Issue Date:
DOI: https://doi.org/10.1023/A:1005748230228