Board Diversity and Corporate Social Responsibility
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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.
KeywordsDiversity Corporate social responsibility Board of Directors Stakeholders
JEL ClassificationsM14 G34 G39
We are grateful for the helpful comments and suggestions of two anonymous referees. Harjoto acknowledges Julian Virtue Professorship endowment and Rothschild awards for financial support and release time for this research. Lee acknowledges Julian Virtue Professorship endowment for financial support and release time for this research.
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