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Hidden Connections: The Link Between Board Gender Diversity and Corporate Social Performance

Abstract

This study examines whether and how female board directors may affect corporate social performance (CSP) by drawing on social role theory and feminist ethics literature. The empirical analysis, based on a sample of 126 firms drawn from the S&P500 group of companies over a 5-year period, suggests that board gender diversity (BGD) significantly affects CSP. However, this impact depends on the social performance metric under investigation. In particular, more gender diverse boards exert stronger influence on CSP metrics focusing on ‘negative’ business practices, such as the ‘concerns’ dimension of the Kinder Lydenberg Domini, Inc. (KLD) ratings. This is because such CSP ratings have the potential to induce higher levels of ‘empathic caring’, which strongly appeals to female directors. Hence, this study reveals further hidden connections in the BGD–CSP link which have important implications for managers, nongovernmental organisations and socially responsible investors.

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Notes

  1. See Fowler and Hope (2007) for a more detailed analysis and a list of indices focusing on positive/negative screening.

Abbreviations

BGD:

Board gender diversity

CSP:

Corporate social performance

CSR:

Corporate social responsibility

DJSI:

Dow Jones sustainability index

GMM:

Generalised method of moments

IV:

Instrumental variable

KLD:

Kinder, Lydenberg, Domini & Co., Inc

NGO:

Non-governmental organisation

SAM:

Sustainable asset management

SEM:

Structural equations modelling

S&P:

Standard and poor’s

SRI:

Socially responsible investment

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Acknowledgments

I wish to express my gratitude to the Editors and anonymous Reviewers of the Journal of Business Ethics for their most constructive comments. I also wish to thank Prof. M. Kilduff, Dr. E. Yin, Dr. S. Zyglidopoulos, Prof. R. Sugden and Dr. C. Pitelis for their encouragement in the realisation of this study and their useful criticism at an earlier version of this paper.

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Boulouta, I. Hidden Connections: The Link Between Board Gender Diversity and Corporate Social Performance. J Bus Ethics 113, 185–197 (2013). https://doi.org/10.1007/s10551-012-1293-7

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Keywords

  • Board gender diversity
  • Corporate social performance
  • Empathy
  • Ethics of care
  • Feminist ethics
  • Gender stereotypes
  • Social role theory