Effect of Diversity in the Board of Directors and Top Management Team on Corporate Social Responsibility

AUTHOR’S CONTRIBUTION

The contributions of the first author were the data collection, data treatment, structuring of econometric models, model estimation, data analysis and drafting of the text. The second author contributed to the work through the data collection, data treatment, structuring of econometric models, model estimation, data analysis and drafting of the text. The third author contributed to the work through the treatment of data, structuring of econometric models, estimation of models, data analysis, drafting of the text, guidance and conducting research. The fourth author contributed to the work through the structuring of econometric models, data analysis, drafting the text, providing guidance and conducting research.

CONFLICTS OF INTEREST

The authors declare that there is no conflict of interest regarding the content of this work.

Sector	N	%
Food and drinks	14	7.22
Trade	14	7.22
Construction	11	5.67
Electricity	30	15.46
Finance and Insurance	22	11.34
Mining, Steel and Metallurgy	11	5.67
Industrial Machinery, Vehicles and Parts	6	3.09
Chemistry, Cellulose, Oil	18	9.28
Telecommunications, Software and Data	10	5.15
Textiles	6	3.09
Transport	10	5.15
Others	42	21.65
Total	194	100

Community	Employees	Environment	Governance
Community development & Philanthropy	Compensation and benefits	Energy and climate change	Board
Product	Diversity and labor rights	Environment policy and reporting	Leadership ethics
Human rights & Supply chain	Training, safety and health	Resource management	Transparency and reporting

Construct	Dependent variables	Calculation	Source	Theoretical basis
Corporate social responsibility (CSR)	CSR	General CSRHub metric: community, employees, environment and governance	CSRHub database	Arminen et al. (2018Arminen, H., Puumalainen, K., Pätäri, S., & Fellnhofer, K. (2018). Corporate social performance: inter-industry and international differences. Journal of Cleaner Production, 177, 426-437. https://doi.org/10.1016/j.jclepro.2017.12.250 https://doi.org/10.1016/j.jclepro.2017.1... ); Bouvain, Baumann & Lundmark (2013Bouvain, P., Baumann, C., & Lundmark, E. (2013). Corporate social responsability in financial services. International Journal of Back Marketing, 31(6), 420-439. https://doi.org/10.1108/09574090910954864 https://doi.org/10.1108/0957409091095486... ); Hughey e Sulkowski (2012Hughey, C., & Sulkowski, A. (2012). More disclosure = better CSR reputation? An examination of CSR reputation leadres and laggards in the global oil and gas industry. Journal of Academy of Business and Economics, 12(2), 24-34.); Kang & Fornes (2017Kang, W. I. kuk, & Fornes, G. (2017). Where are they going? Case of British and Japanese human resource management. Journal of Asia Business Studies, 11(3), 296-322. https://doi.org/10.1108/JABS-07-2015-0111 https://doi.org/10.1108/JABS-07-2015-011... ); Mohamed & Salah (2016Mohamed, I. M. A., & Salah, W. (2016). Investigating corporate social responsibility disclosure by banks from institutional theory perspective. Journal of Administrative and Business Studies, 2(6), 280-293. https://doi.org/10.20474/jabs-2.6.3 https://doi.org/10.20474/jabs-2.6.3... ); Vaia, Bisogno & Tommasetti (2017Vaia, G., Bisogno, M., & Tommasetti, A. (2017). Investigating the relationship between the social and economic-financial performance. Applied Finance and Accounting, 3(1), 55. https://doi.org/10.11114/afa.v3i1.2126 https://doi.org/10.11114/afa.v3i1.2126... ); Westermann, Niblock & Kortt (2019Westermann, S., Niblock, S. J., & Kortt, M. A. (2019). Does it pay to be responsible? An empirical investigation of corporate social responsibility and REITs in Australia. Asia-Pacific Journal of Accounting and Economics. https://doi.org/https://doi.org/10.1080/16081625.2019.1673188 https://doi.org/https://doi.org/10.1080/... )
Corporate social responsibility (CSR)	CSR_EEC	Average of variables: community, employees and environment	CSRHub database	Bouvain, Baumann & Lundmark (2013Bouvain, P., Baumann, C., & Lundmark, E. (2013). Corporate social responsability in financial services. International Journal of Back Marketing, 31(6), 420-439. https://doi.org/10.1108/09574090910954864 https://doi.org/10.1108/0957409091095486... ); Thanetsunthorn & Wuthisatian (2016)
Construct	Independent variables	Calculation	Source	Theoretical basis	Expected signal
Diversity of the board of directors (DIVER_BOARD)	Women on the board of directors (PW_BOARD)	Proportion of women on the board of directors	Reference form	Bernardi & Threadgill (2010Bernardi, R. A., & Threadgill, V. H. (2010). Women directors and corporate social responsibility. EJBO - Electronic Journal of Business Ethics and Organization Studies, 15(2), 15-21.); Glass et al. (2016Glass, C., Cook, A., & Ingersoll, A. R. (2016). Do women leaders promote sustainability? Analyzing the effect of corporate governance composition on environmental performance. Business Strategy and the Environment, 25(7), 495-511. https://doi.org/10.1002/bse.1879 https://doi.org/10.1002/bse.1879... )	+
	Age heterogeneity of the board of directors (AGE_CV_BOARD)	Coefficient of variation in the age of board of director members	Reference form	Ferrero-Ferrero et al. (2013Ferrero-Ferrero, I., Fernández-Izquierdo, M. Á., & Muñoz-Torres, M. J. (2013). Integrating sustainability into corporate governance: an empirical study on board diversity. Corporate Social Responsibility and Environmental Management, 22(4), 193-207. https://doi.org/10.1002/csr.1333 https://doi.org/10.1002/csr.1333... )	+
	Age group of the board of directors (AGE_AVE_BOARD)	Average age of the board of director members	Reference form	Giannarakis (2014Giannarakis, G. (2014). The determinants influencing the extent of CSR disclosure. International Journal of Law and Management, 56(5), 393-416. https://doi.org/10.1108/IJLMA-05-2013-0021 https://doi.org/10.1108/IJLMA-05-2013-00... ); Post et al. (2011Post, C., Rahman, N., & Rubow, E. (2011). Green governance: boards of directors’ composition and environmental corporate social responsibility. Business and Society, 50(1), 189-223. https://doi.org/10.1177/0007650310394642 https://doi.org/10.1177/0007650310394642... )	+
Diversity of the Executive Management (DIVER_EXECUTIVE)	Women on the top management team (PW_EXECUTIVE)	Proportion of women on the top management team	Reference form	Bernardi & Threadgill (2010Bernardi, R. A., & Threadgill, V. H. (2010). Women directors and corporate social responsibility. EJBO - Electronic Journal of Business Ethics and Organization Studies, 15(2), 15-21.); Glass et al. (2016Glass, C., Cook, A., & Ingersoll, A. R. (2016). Do women leaders promote sustainability? Analyzing the effect of corporate governance composition on environmental performance. Business Strategy and the Environment, 25(7), 495-511. https://doi.org/10.1002/bse.1879 https://doi.org/10.1002/bse.1879... )	+
	Age heterogeneity of the top management team (AGE_CV_EXECUTIVE)	Coefficient of variation in the age of top management team members	Reference form	Ferrero-Ferrero et al. (2013Ferrero-Ferrero, I., Fernández-Izquierdo, M. Á., & Muñoz-Torres, M. J. (2013). Integrating sustainability into corporate governance: an empirical study on board diversity. Corporate Social Responsibility and Environmental Management, 22(4), 193-207. https://doi.org/10.1002/csr.1333 https://doi.org/10.1002/csr.1333... )	+
	Age group of the top management team (AGE_AVE_EXECUTIVE)	Average age of the top management team members	Reference form	Giannarakis (2014Giannarakis, G. (2014). The determinants influencing the extent of CSR disclosure. International Journal of Law and Management, 56(5), 393-416. https://doi.org/10.1108/IJLMA-05-2013-0021 https://doi.org/10.1108/IJLMA-05-2013-00... ); Post et al. (2011Post, C., Rahman, N., & Rubow, E. (2011). Green governance: boards of directors’ composition and environmental corporate social responsibility. Business and Society, 50(1), 189-223. https://doi.org/10.1177/0007650310394642 https://doi.org/10.1177/0007650310394642... )	+
Control variables (CONT)	Board of director size (SIZE_BOARD)	Number of members on the board of directors	Reference form	Bernardi & Threadgill (2010Bernardi, R. A., & Threadgill, V. H. (2010). Women directors and corporate social responsibility. EJBO - Electronic Journal of Business Ethics and Organization Studies, 15(2), 15-21.); Hafsi & Turgut (2013Hafsi, T., & Turgut, G. (2013). Boardroom diversity and its effect on social performance: conceptualization and empirical evidence. Journal of Business Ethics, 112(3), 463-479. https://doi.org/10.1007/s10551-012-1272-z https://doi.org/10.1007/s10551-012-1272-... )	+
	Independence of the board of directors (IND_BOARD)	Board of directors’ independence dummy (value 0 when there are no effective independent directors declared; value 1 when there are effective independent directors declared)	Reference form	Hussain, Rigoni & Orij (2018); Ibrahim & Hanefah (2016Ibrahim, A. H., & Hanefah, M. M. (2016). Board diversity and corporate social responsibility in Jordan. Journal of Financial Reporting and Accounting, 14(2), 279-298. https://doi.org/10.1108/JFRA-06-2015-0065 https://doi.org/10.1108/JFRA-06-2015-006... )	+
	Number of top management team members (SIZE_EXECUTIVE)	Number of top management team members	Reference form	Hafsi & Turgut (2013Hafsi, T., & Turgut, G. (2013). Boardroom diversity and its effect on social performance: conceptualization and empirical evidence. Journal of Business Ethics, 112(3), 463-479. https://doi.org/10.1007/s10551-012-1272-z https://doi.org/10.1007/s10551-012-1272-... )	+
	Firm Return on assets (ROA)	Net profit / total assets	Economatica®	Al-Shaer & Zaman (2016Al-Shaer, H., & Zaman, M. (2016). Board gender diversity and sustainability reporting quality. Journal of Contemporary Accounting and Economics, 12(3), 210-222. https://doi.org/10.1016/j.jcae.2016.09.001 https://doi.org/10.1016/j.jcae.2016.09.0... ); Fuente et al. (2017Fuente, J. A., García-Sánchez, I. M., & Lozano, M. B. (2017). The role of the board of directors in the adoption of GRI guidelines for the disclosure of CSR information. Journal of Cleaner Production, 141, 737-750. https://doi.org/10.1016/j.jclepro.2016.09.155 https://doi.org/10.1016/j.jclepro.2016.0... )	+
	Firm Size (SIZE)	Natural logarithm of total assets	Economatica®	Ricardo, Barcellos & Bortolon (2017Ricardo, V. S., Barcellos, S. S., & Bortolon, P. M. (2017). Relatório de sustentabilidade ou relato integrado das empresas listadas na BM&FBovespa: fatores determinantes de divulgação. Revista de Gestão Social e Ambiental, 11(1), 90-104.); Santana et al. (2015Santana, L. M. de, Góis, A. D., De Luca, M. M. M., & Vasconcelos, A. C. de. (2015). Relação entre disclosure socioambiental, práticas de governança corporativa e desempenho empresarial. Revista Organizações Em Contexto, 11(21), 49-72. https://doi.org/10.15603/1982-8756/roc https://doi.org/10.15603/1982-8756/roc... )	+

Variable		Mean	Median	Standard Deviation	Coefficient of variation	Minimum	Maximum
CSR	CSR	55.00	56.00	6.28	0.11	36.00	69.00
CSR	CSR_EEC	58.00	58.00	7.18	0.12	35.00	74.00
Board of directors	SIZE_BOARD	10.25	9.00	5.02	0.49	3.00	29.00
	NW_BOARD	1.02	1.00	1.29	1.26	0.00	6.00
	PW_BOARD	0.10	0.08	0.11	1.15	0.00	0.42
	AGE_CV_BOARD	0.18	0.18	0.05	0.28	0.06	0.37
	AGE_AVE_BOARD	58.46	58.00	5.22	0.09	46.00	72.00
	NMIND_BOARD	3.28	3.00	2.29	0.69	0.00	11.00
	IND_BOARD	0.88	1.00	0.32	0.36	0.00	1.00
Top management team	SIZE_EXECUTIVE	7.57	6.00	10.33	1.37	1.00	93.00
	NW_EXECUTIVE	0.64	0.00	0.94	1.47	0.00	5.00
	PW_EXECUTIVE	0.10	0.00	0.16	1.63	0.00	1.00
	AGE_CV_EXECUTIVE	0.13	0.12	0.06	0.47	0.01	0.31
	AGE_AVE_EXECUTIVE	51.38	51.5	5.99	0.12	37.00	71.00

Variables	Dependent: CSR (Community, Employees, Environment and Governance)			Dependent: CSR_EEC (Employees, Environment and Community)
Explanatory	(i)	(ii)	(iii)	(iv)	(v)	(vi)
PW_BOARD		9.790 **	10.352 **		10.197 **	11.434 *
		(3.926)	(4.215)		(4.435)	(4.658)
AGE_CV_BOARD		-16.823 *	-17.181 *		-16.149	-17.336
		(9.156)	(10.143)		(10.776)	(11.711)
PW_EXECUTIVE	-1.925		-1.644	-3.874		-3.474
	(2.924)		(3.027)	(3.273)		(3.368)
AGE_CV_EXECUTIVE	-4.546		0.580	-5.565		-0.191
	(8.027)		(7.667)	(8.787)		(8.288)
SIZE_BOARD		0.189 *	0.225 **		0.243 **	0.275 *
		(0.108)	(0.110)		(0.121)	(0.121)
IND_BOARD		-0.250	-0.487		-1.588	-2.048
		(1.239)	(1.235)		(1.529)	(1.483)
SIZE_EXECUTIVE	-0.004		-0.025	-0.036		-0.063
	(0.028)		(0.033)	(0.036)		(0.041)
ROA	-9.040	-11.185 *	-12.033 *	-7.780	-9.977	-10.993
	(6.454)	(6.132)	(6.506)	(6.947)	(6.629)	(6.948)
SIZE	1.490 ***	1.407 ***	1.436 ***	1.986 ***	1.726 ***	1.862 **
	(0.377)	(0.292)	(0.374)	(0.437)	(0.350)	(0.430)
Constant	31.799 ***	32.999 ***	32.641 ***	26.588 ***	30.648 ***	29.418 **
	(6.714)	(5.727)	(6.658)	(7.752)	(6.824)	(7.682)
N	150	155	149	150	155	149
F	10.90	7.18	6.00	9.84	8.13	6.42
p-value	0.000	0.000	0.000	0.000	0.000	0.000
R²	0.172	0.236	0.249	0.202	0.260	0.284
Average VIF	1.26	1.09	1.24	1.26	1.09	1.24

Variables	Dependent: CSR (Community, Employees, Environment and Governance)			Dependent: CSR_EEC (Employees, Environment and Community)
Explanatory	(vii)	(viii)	(ix)	(x)	(xi)	(xii)
PW_BOARD		8.942 **	6.276 *		9.572 **	7.004 *
		(3.941)	(3.716)		(4.435)	(4.083)
AGE_AVE_BOARD		0.029	-0.119		0.106	-0.065
		(0.099)	(0.096)		(0.112)	(0.105)
PW_EXECUTIVE	0.430		-1.345	-0.925		-2.31
	(2.701)		(2.703)	(2.992)		(2.962)
AGE_AVE_EXECUTIVE	0.336 ***		0.374 ***	0.424 ***		0.432 ***
	(0.087)		(0.082)	(0.093)		(0.089)
SIZE_BOARD		0.196 *	0.153		0.257 **	0.198 *
		(0.106)	(0.098)		(0.119)	(0.109)
IND_BOARD		0.008	0.755		-1.149	-0.486
		(1.217)	(1.110)		(1.462)	(1.323)
SIZE_EXECUTIVE	0.024		0.035	-0.0004		0.001
	(0.030)		(0.032)	(0.032)		(0.036)
ROA	-11.387 *	-9.197	-11.474 *	-10.729 *	-8.547	-11.172 *
	(6.107)	(6.147)	(6.05)	(6.437)	(6.630)	(6.359)
SIZE	1.13 **	1.482 ***	1.029 **	1.53 ***	1.772 ***	1.393 ***
	(0.365)	(0.289)	(0.360)	(0.406)	(0.346)	(0.398)
Constant	19.512 **	26.629 **	23.531 **	11.162	20.209 **	14.773
	(7.057)	(8.253)	(9.430)	(7.781)	(9.345)	(10.273)
N	150	155	149	150	155	149
F	14.09	7.14	9.84	15.98	8.15	10.29
p-value	0.000	0.000	0.000	0.000	0.000	0.000
R²	0.258	0.218	0.323	0.309	0.253	0.368
Average VIF	1.26	1.07	1.27	1.26	1.07	1.27

Variable	Expected result	Theoretical basis	Obtained result	Conclusion on the hypothesis
Women on the board of directors (PW_BOARD)	+	Bernardi and Threadgill (2010Bernardi, R. A., & Threadgill, V. H. (2010). Women directors and corporate social responsibility. EJBO - Electronic Journal of Business Ethics and Organization Studies, 15(2), 15-21.); Glass et al. (2016Glass, C., Cook, A., & Ingersoll, A. R. (2016). Do women leaders promote sustainability? Analyzing the effect of corporate governance composition on environmental performance. Business Strategy and the Environment, 25(7), 495-511. https://doi.org/10.1002/bse.1879 https://doi.org/10.1002/bse.1879... )	+	Confirmed (Hypothesis 1a)
Women in the top management team (PW_EXECUTIVE)	+	Bernardi and Threadgill (2010Bernardi, R. A., & Threadgill, V. H. (2010). Women directors and corporate social responsibility. EJBO - Electronic Journal of Business Ethics and Organization Studies, 15(2), 15-21.); Glass et al. (2016Glass, C., Cook, A., & Ingersoll, A. R. (2016). Do women leaders promote sustainability? Analyzing the effect of corporate governance composition on environmental performance. Business Strategy and the Environment, 25(7), 495-511. https://doi.org/10.1002/bse.1879 https://doi.org/10.1002/bse.1879... )	Not significant	Not confirmed (Hypothesis 1b)
Age heterogeneity of members of the board of directors (AGE_CV_BOARD)	+	Ferrero-Ferrero et al. (2013Ferrero-Ferrero, I., Fernández-Izquierdo, M. Á., & Muñoz-Torres, M. J. (2013). Integrating sustainability into corporate governance: an empirical study on board diversity. Corporate Social Responsibility and Environmental Management, 22(4), 193-207. https://doi.org/10.1002/csr.1333 https://doi.org/10.1002/csr.1333... )	-	Not confirmed (Hypothesis 2a)
Age heterogeneity of members of the top management team (AGE_CV_EXECUTIVE)	+	Ferrero-Ferrero et al. (2013Ferrero-Ferrero, I., Fernández-Izquierdo, M. Á., & Muñoz-Torres, M. J. (2013). Integrating sustainability into corporate governance: an empirical study on board diversity. Corporate Social Responsibility and Environmental Management, 22(4), 193-207. https://doi.org/10.1002/csr.1333 https://doi.org/10.1002/csr.1333... )	Not significant	Not confirmed (Hypothesis 2b)
Age group of members of the board of directors (AGE_AVE_BOARD)	+	Giannarakis (2014Giannarakis, G. (2014). The determinants influencing the extent of CSR disclosure. International Journal of Law and Management, 56(5), 393-416. https://doi.org/10.1108/IJLMA-05-2013-0021 https://doi.org/10.1108/IJLMA-05-2013-00... ); Post et al. (2011Post, C., Rahman, N., & Rubow, E. (2011). Green governance: boards of directors’ composition and environmental corporate social responsibility. Business and Society, 50(1), 189-223. https://doi.org/10.1177/0007650310394642 https://doi.org/10.1177/0007650310394642... )	Not significant	Not confirmed (Hypothesis 3a)
Age group of members of the top management team (AGE_AVE_EXECUTIVE)	+	Giannarakis (2014Giannarakis, G. (2014). The determinants influencing the extent of CSR disclosure. International Journal of Law and Management, 56(5), 393-416. https://doi.org/10.1108/IJLMA-05-2013-0021 https://doi.org/10.1108/IJLMA-05-2013-00... ); Post et al. (2011Post, C., Rahman, N., & Rubow, E. (2011). Green governance: boards of directors’ composition and environmental corporate social responsibility. Business and Society, 50(1), 189-223. https://doi.org/10.1177/0007650310394642 https://doi.org/10.1177/0007650310394642... )	+	Confirmed (Hypothesis 3b)

C S R = β_{0} + β_{1} {D I V E R_B O A R D}_{i t} + β_{2} {D I V E R_E X E C U T I V E}_{i t} + β_{3} {S I Z E_B O A R D}_{i t} + β_{4} {I N D_B O A R D}_{i t} + β_{5} {S I Z E_E X E C U T I V E}_{i t} + β_{6} {R O A}_{i t} + β_{7} {S I Z E}_{i t} + ε

[1] priscilaprudencio.ufc@gmail.com

Brasil

Brasil

Effect of Diversity in the Board of Directors and Top Management Team on Corporate Social Responsibility

Abstract