Corporate social responsibility strategy and corporate environmental and social performance: The moderating role of board gender diversity
Corresponding Author
Nurlan Orazalin
Bang College of Business, KIMEP University, Almaty, Kazakhstan
Correspondence
Nurlan Orazalin, Bang College of Business, KIMEP University, Almaty, Kazakhstan.
Email: orazalin@kimep.kz
Search for more papers by this authorMady Baydauletov
Higher School of Economics and Business, Al-Farabi Kazakh National University, Almaty, Kazakhstan
Search for more papers by this authorCorresponding Author
Nurlan Orazalin
Bang College of Business, KIMEP University, Almaty, Kazakhstan
Correspondence
Nurlan Orazalin, Bang College of Business, KIMEP University, Almaty, Kazakhstan.
Email: orazalin@kimep.kz
Search for more papers by this authorMady Baydauletov
Higher School of Economics and Business, Al-Farabi Kazakh National University, Almaty, Kazakhstan
Search for more papers by this authorAbstract
Drawing on upper echelons and resource dependence theories and using data of European listed companies over the period 2009–2016, we examine the effects of corporate social responsibility (CSR) strategy and board gender diversity on environmental and social performance. In particular, we investigate whether CSR strategy contributes to improving corporate environmental and social performance, and whether this relationship is moderated by board gender diversity. Our empirical findings suggest that firms with more effective CSR strategies exhibit better environmental and social performance. The results also show that board gender diversity is positively associated with environmental and social performance, thus supporting the notion that board gender diversity promotes sustainable development. Furthermore, the findings reveal that the positive relationship between CSR strategy and environmental performance is negatively moderated by board gender diversity. Finally, the results show that that national governance quality and firm size are important underlying factors affecting corporate environmental and social performance.
CONFLICT OF INTEREST
The authors declare that they have no conflict of interest.
REFERENCES
- Adams, R. B. (2016). Women on boards: The superheroes of tomorrow? Leadership Quarterly, 27(3), 371–386. https://doi.org/10.1016/j.leaqua.2015.11.001
- Adams, R. B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291–309. https://doi.org/10.1016/j.jfineco.2008.10.007
- Aguinis, H., & Glavas, A. (2012). What we know and don't know about corporate social responsibility: A review and research agenda. Journal of Management, 38(4), 932–968. https://doi.org/10.1177/0149206311436079
- Al-Tuwaijri, S. A., Christensen, T. E., & Hughes, K. E. (2004). The relations among environmental disclosure, environmental performance, and economic performance: A simultaneous equations approach. Accounting, Organizations and Society, 29(5–6), 447–471. https://doi.org/10.1016/S0361-3682(03)00032-1
- Alberici, A., & Querci, F. (2016). The quality of disclosures on environmental policy: The profile of financial intermediaries. Corporate Social Responsibility and Environmental Management, 23(5), 283–296. https://doi.org/10.1002/csr.1375
- Aragón-Correa, J. A., Hurtado-Torres, N., Sharma, S., & García-Morales, V. J. (2008). Environmental strategy and performance in small firms: A resource-based perspective. Journal of Environmental Management, 86(1), 88–103. https://doi.org/10.1016/j.jenvman.2006.11.022
- Arena, C., Bozzolan, S., & Michelon, G. (2015). Environmental reporting: Transparency to stakeholders or stakeholder manipulation? An analysis of disclosure tone and the role of the board of directors. Corporate Social Responsibility and Environmental Management, 22(6), 346–361. https://doi.org/https://doi.org/10.1002/csr.1350
- Artiach, T., Lee, D., Nelson, D., & Walker, J. (2010). The determinants of corporate sustainability performance. Accounting and Finance, 50(1), 31–51. https://doi.org/10.1111/j.1467-629X.2009.00315.x
- Asgary, N., & Li, G. (2016). Corporate social responsibility: Its economic impact and link to the bullwhip effect. Journal of Business Ethics, 135(4), 665–681. https://doi.org/10.1007/s10551-014-2492-1
- Banerjee, S. B. (2001). Managerial perceptions of corporate environmentalism: Interpretations from industry and strategic implications for organizations. Journal of Management Studies, 38(4), 489–513. https://doi.org/10.1111/1467-6486.00246
- Barako, D. G., Hancock, P., & Izan, H. Y. (2006). Factors influencing voluntary corporate disclosure by Kenyan companies. Corporate Governance: An International Review, 14(2), 107–125. https://doi.org/10.1111/j.1467-8683.2006.00491.x
- Baum, C. F., Schaffer, M. E., & Stillman, S. (2003). Instrumental variables and GMM: Estimation and testing. The Stata Journal: Promoting Communications on Statistics and Stata, 3(1), 1–31. https://doi.org/10.1177/1536867x0300300101
10.1177/1536867X0300300101 Google Scholar
- Bear, S., Rahman, N., & Post, C. (2010). The impact of board diversity and gender composition on corporate social responsibility and firm reputation. Journal of Business Ethics, 97(2), 207–221. https://doi.org/10.1007/s10551-010-0505-2
- Bhupendra, K. V., & Sangle, S. (2015). What drives successful implementation of pollution prevention and cleaner technology strategy? The role of innovative capability. Journal of Environmental Management, 155, 184–192. https://doi.org/10.1016/j.jenvman.2015.03.032
- Birindelli, G., Iannuzzi, A. P., & Savioli, M. (2019). The impact of women leaders on environmental performance: Evidence on gender diversity in banks. Corporate Social Responsibility and Environmental Management, 26(6), 1485–1499. https://doi.org/10.1002/csr.1762
- Biswas, P. K., Mansi, M., & Pandey, R. (2018). Board composition, sustainability committee and corporate social and environmental performance in Australia. Pacific Accounting Review, 30(4), 517–540. https://doi.org/10.1108/PAR-12-2017-0107
- Ciocirlan, C., & Pettersson, C. (2012). Does workforce diversity matter in the fight against climate change? An analysis of Fortune 500 Companies. Corporate Social Responsibility and Environmental Management, 19(1), 47–62. https://doi.org/10.1002/csr.279
- Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2008). Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations and Society, 33(4), 303–327. https://doi.org/10.1016/j.aos.2007.05.003
- Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2011). Does it really pay to be green? Determinants and consequences of proactive environmental strategies. Journal of Accounting and Public Policy, 30(2), 122–144. https://doi.org/10.1016/j.jaccpubpol.2010.09.013
- Cucari, N., Esposito De Falco, S., & Orlando, B. (2018). Diversity of Board of Directors and Environmental Social Governance: Evidence from Italian listed companies. Corporate Social Responsibility and Environmental Management, 25(3), 250–266. https://doi.org/10.1002/csr.1452
- de Villiers, C., Naiker, V., & van Staden, C. J. (2011). The effect of board characteristics on firm environmental performance. Journal of Management, 37(6), 1636–1663. https://doi.org/10.1177/0149206311411506
- Elmagrhi, M. H., Ntim, C. G., Elamer, A. A., & Zhang, Q. (2018). A study of environmental policies and regulations, governance structures, and environmental performance: The role of female directors. Business Strategy and the Environment, 28(1), 206–220. https://doi.org/10.1002/bse.2250
- Escrig-Olmedo, E., Muñoz-Torres, M. J., Fernández-Izquierdo, M. Á., & Rivera-Lirio, J. M. (2017). Measuring corporate environmental performance: A methodology for sustainable development. Business Strategy and the Environment, 26(2), 142–162. https://doi.org/10.1002/bse.1904
- Fraj-Andrés, E., Martínez-Salinas, E., & Matute-Vallejo, J. (2009). Factors affecting corporate environmental strategy in Spanish industrial Firms. Business Strategy and the Environment, 18(8), 500–514. https://doi.org/10.1002/bse.611
- Frias-Aceituno, J. V., Rodriguez-Ariza, L., & Garcia-Sanchez, I. M. (2013). The role of the board in the dissemination of integrated corporate social reporting. Corporate Social Responsibility and Environmental Management, 20(4), 219–233. https://doi.org/10.1002/csr.1294
- Furlotti, K., Mazza, T., Tibiletti, V., & Triani, S. (2019). Women in top positions on boards of directors: Gender policies disclosed in Italian sustainability reporting. Corporate Social Responsibility and Environmental Management, 26(1), 57–70. https://doi.org/10.1002/csr.1657
- Gallego-Álvarez, P. I., & Ortas, P. E. (2017). Corporate environmental sustainability reporting in the context of national cultures: A quantile regression approach. International Business Review, 26(2), 337–353. https://doi.org/10.1016/j.ibusrev.2016.09.003
- Garcia, A. S., Mendes-Da-Silva, W., & Orsato, R. (2017). Sensitive industries produce better ESG performance: Evidence from emerging markets. Journal of Cleaner Production, 150, 135–147. https://doi.org/10.1016/j.jclepro.2017.02.180
- García Martín, C. J., & Herrero, B. (2019). Do board characteristics affect environmental performance? A study of EU firms. Corporate Social Responsibility and Environmental Management, 27(1), 74–94. https://doi.org/10.1002/csr.1775
- Glass, 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
- Gul, F. A., Srinidhi, B., & Ng, A. C. (2011). Does board gender diversity improve the informativeness of stock prices? Journal of Accounting and Economics, 51(3), 314–338. https://doi.org/10.1016/j.jacceco.2011.01.005
- Halme, M., Rintamäki, J., Knudsen, J. S., Lankoski, L., & Kuisma, M. (2018). When is there a sustainability case for CSR? Pathways to Environmental and Social Performance Improvements. Business and Society, 1–47. https://doi.org/https://doi.org/10.1177/0007650318755648
- Hambrick, D. C. (2007). Upper echelons theory: An update. Academy of Management Review, 32(2), 334–343. https://doi.org/10.5465/AMR.2007.24345254
- Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206. https://doi.org/10.5465/AMR.1984.4277628
- Haque, F. (2017). The effects of board characteristics and sustainable compensation policy on carbon performance of UKfirms. British Accounting Review, 49(3), 347–364. https://doi.org/10.1016/j.bar.2017.01.001
- Haque, F., & Ntim, C. G. (2018). Environmental policy, sustainable development, governance mechanisms and environmental performance. Business Strategy and the Environment, 27(3), 415–435. https://doi.org/10.1002/bse.2007
- Hartmann, J., & Uhlenbruck, K. (2015). National institutional antecedents to corporate environmental performance. Journal of World Business, 50(4), 729–741. https://doi.org/10.1016/j.jwb.2015.02.001
- Helfaya, A., & Moussa, T. (2017). Do board's corporate social responsibility strategy and orientation influence environmental sustainability disclosure? UK evidence. Business Strategy and the Environment, 26(8), 1061–1077. https://doi.org/10.1002/bse.1960
- Hillman, A. J., Cannella, A. A., & Paetzold, R. L. (2000). The resource dependence role of corporate directors: Strategic adaptation of board composition in response to environmental change. Journal of Management Studies, 37(2), 235–256. https://doi.org/10.1111/1467-6486.00179
- Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of Management Review, 28(3), 383–396. https://doi.org/10.5465/AMR.2003.10196729
- Hillman, A. J., Shropshire, C., & Cannella, A. A. (2007). Organizational predictors of women on corporate boards. Academy of Management Journal, 50(4), 941–952. https://doi.org/10.5465/AMJ.2007.26279222
- Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate governance and sustainability performance: Analysis of triple bottom line performance. Journal of Business Ethics, 149(2), 411–432. https://doi.org/10.1007/s10551-016-3099-5
- Ioannou, I., & Serafeim, G. (2012). What drives corporate social performance the role of nation-level institutions. Journal of International Business Studies, 43(9), 834–864. https://doi.org/10.1057/jibs.2012.26
- Jia, M., & Zhang, Z. (2013). Critical mass of women on BODs, multiple identities, and corporate philanthropic disaster response: Evidence from privately owned chinese firms. Journal of Business Ethics, 118(2), 303–317. https://doi.org/10.1007/s10551-012-1589-7
- Jizi, M. (2017). The influence of board composition on sustainable development disclosure. Business Strategy and the Environment, 26(5), 640–655. https://doi.org/10.1002/bse.1943
- Jo, H., & Harjoto, M. A. (2011). Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility. Journal of Business Ethics, 103(3), 351–383. https://doi.org/10.1007/s10551-011-0869-y
- Judge, W. Q., & Douglas, T. J. (1998). Performance implications of incorporating natural environmental issues into the strategic planning process: An empirical assessment. Journal of Management Studies, 35(2), 241–262. https://doi.org/10.1111/1467-6486.00092
- Kassinis, G., Panayiotou, A., Dimou, A., & Katsifaraki, G. (2016). Gender and environmental sustainability: A longitudinal analysis. Corporate Social Responsibility and Environmental Management, 23(6), 399–412. https://doi.org/10.1002/csr.1386
- Klassen, R. D., & Whybark, D. C. (1999). The impact of environmental technologies on manufacturing performance. Academy of Management Journal, 42(6), 599–615. https://doi.org/10.2307/256982
- Kumar, P., & Zattoni, A. (2013). How much do country-level or firm-level variables matter in corporate governance studies? Corporate Governance: An International Review, 21, 199–200. https://doi.org/10.1111/corg.12025
- Kyaw, K., Olugbode, M., & Petracci, B. (2017). Can board gender diversity promote corporate social performance? Corporate Governance: The International Journal of Business in Society, 17(5), 789–802. https://doi.org/10.1108/CG-09-2016-0183
- Lai, J. H., & Chen, L. Y. (2014). The valuation effect of corporate governance on stakeholder wealth: Evidence from strategic alliances. International Review of Economics and Finance, 32, 117–131. https://doi.org/10.1016/j.iref.2014.01.010
- Lourenço, I. C., & Branco, M. C. (2013). Determinants of corporate sustainability performance in emerging markets: The Brazilian case. Journal of Cleaner Production, 57, 134–141. https://doi.org/10.1016/j.jclepro.2013.06.013
- Lourenço, I. C., Branco, M. C., Curto, J. D., & Eugénio, T. (2012). how does the market value corporate sustainability performance? Journal of Business Ethics, 108(4), 417–428. https://doi.org/10.1007/s10551-011-1102-8
- Mallin, C., & Michelon, G. (2011). Board reputation attributes and corporate social performance: An empirical investigation of the US Best Corporate Citizens. Accounting and Business Research, 41(2), 119–144. https://doi.org/10.1080/00014788.2011.550740
- Mallin, C., Michelon, G., & Raggi, D. (2013). Monitoring intensity and stakeholders' orientation: How does governance affect social and environmental disclosure? Journal of Business Ethics, 114(1), 29–43. https://doi.org/10.1007/s10551-012-1324-4
- Mårtensson, K., & Westerberg, K. (2016). Corporate environmental strategies towards sustainable development. Business Strategy and the Environment, 25(1), 1–9. https://doi.org/10.1002/bse.1852
- Moreno-Gómez, J., Lafuente, E., & Vaillant, Y. (2018). Gender diversity in the board, women's leadership and business performance. Gender in Management, 33(2), 104–122. https://doi.org/10.1108/GM-05-2017-0058
- Naciti, V. (2019). Corporate governance and board of directors: The effect of a board composition on firm sustainability performance. Journal of Cleaner Production, 237, 1-8. https://doi.org/10.1016/j.jclepro.2019.117727
- Nadeem, M., Zaman, R., & Saleem, I. (2017). Boardroom gender diversity and corporate sustainability practices: Evidence from Australian Securities Exchange listed firms. Journal of Cleaner Production, 149, 874–885. https://doi.org/10.1016/j.jclepro.2017.02.141
- Nave, A., & Ferreira, J. (2019). Corporate social responsibility strategies: Past research and future challenges. Corporate Social Responsibility and Environmental Management, 26(4), 885–901. https://doi.org/10.1002/csr.1729
- Ngobo, P. V., & Fouda, M. (2012). Is “good” governance good for business? A cross-national analysis of firms in African countries. Journal of World Business, 47(3), 435–449. https://doi.org/10.1016/j.jwb.2011.05.010
- Nguyen, T., Locke, S., & Reddy, K. (2015). Ownership concentration and corporate performance from a dynamic perspective: Does national governance quality matter? International Review of Financial Analysis, 41, 148–161. https://doi.org/10.1016/j.irfa.2015.06.005
- Orazalin, N. (2020). Do board sustainability committees contribute to corporate environmental and social performance? The mediating role of corporate social responsibility strategy. Business Strategy and the Environment, 29(1), 140–153. https://doi.org/10.1002/bse.2354
- Orazalin, N., & Mahmood, M. (2018). Economic, environmental, and social performance indicators of sustainability reporting: Evidence from the Russian oil and gas industry. Energy Policy, 121, 70–79. https://doi.org/https://doi.org/10.1016/j.enpol.2018.06.015
- Ortas, E., Álvarez, I., Jaussaud, J., & Garayar, A. (2015). The impact of institutional and social context on corporate environmental, social and governance performance of companies committed to voluntary corporate social responsibility initiatives. Journal of Cleaner Production, 108, 673–684. https://doi.org/10.1016/j.jclepro.2015.06.089
- Pallant, J. (2007). SPSS survival manual: A step by step guide to data analysis using SPSS for Windows (Version 15). New York, NY: Open University Press, McGraw Hill.
- Pfeffer, J., & Salancik, G. R. (1978). The External Control of Organizations: A Resource Dependence Approach. New York, NY: Harper and Row. https://doi.org/10.2307/2392573
- Post, C., Rahman, N., & McQuillen, C. (2015). From board composition to corporate environmental performance through sustainability-themed alliances. Journal of Business Ethics, 130(2), 423–435. https://doi.org/10.1007/s10551-014-2231-7
- Pucheta-Martínez, M. C., & Bel-Oms, I. (2019). What have we learnt about board gender diversity as a business strategy? The appointment of board subcommittees. Business Strategy and the Environment, 28(2), 301–315. https://doi.org/10.1002/bse.2226
- Qiu, Y., Shaukat, A., & Tharyan, R. (2016). Environmental and social disclosures: Link with corporate financial performance. British Accounting Review, 48(1), 102–116. https://doi.org/10.1016/j.bar.2014.10.007
- Reverte, C. (2009). Determinants of corporate social responsibility disclosure ratings by Spanish listed firms. Journal of Business Ethics, 88(2), 351–366. https://doi.org/10.1007/s10551-008-9968-9
- Reverte, C., Gómez-Melero, E., & Cegarra-Navarro, J. G. (2016). The influence of corporate social responsibility practices on organizational performance: Evidence from eco-responsible Spanish firms. Journal of Cleaner Production, 112, 2870–2884. https://doi.org/10.1016/j.jclepro.2015.09.128
- Rodrigue, M., Magnan, M., & Cho, C. H. (2013). Is environmental governance substantive or symbolic? An empirical investigation. Journal of Business Ethics, 114(1), 107–129. https://doi.org/10.1007/s10551-012-1331-5
- Ruggiero, P., & Cupertino, S. (2018). CSR strategic approach, financial resources and corporate social performance: The mediating effect of innovation. Sustainability (Switzerland), 10(10), 1–22. https://doi.org/10.3390/su10103611
- Shahab, Y., Ntim, C. G., Chengang, Y., Ullah, F., & Fosu, S. (2018). Environmental policy, environmental performance, and financial distress in China: Do top management team characteristics matter? Business Strategy and the Environment, 27(8), 1635–1652. https://doi.org/10.1002/bse.2229
- Shahzad, A. M., Rutherford, M. A., & Sharfman, M. P. (2016). Stakeholder-centric governance and corporate social performance: A cross-national study. Corporate Social Responsibility and Environmental Management, 23(2), 100–112. https://doi.org/10.1002/csr.1368
- Shaukat, A., Qiu, Y., & Trojanowski, G. (2016). Board attributes, corporate social responsibility strategy, and corporate environmental and social performance. Journal of Business Ethics, 135(3), 569–585. https://doi.org/10.1007/s10551-014-2460-9
- Udayasankar, K. (2008). Corporate social responsibility and firm size. Journal of Business Ethics, 83(2), 167–175. https://doi.org/10.1007/s10551-007-9609-8
- Valls Martínez, M. D. C., Cruz Rambaud, S., & Parra Oller, I. M. (2019). Gender policies on board of directors and sustainable development. Corporate Social Responsibility and Environmental Management, 26(6), 1539–1553. https://doi.org/10.1002/csr.1825
- Velte, P. (2016). Women on management board and ESG performance. Journal of Global Responsibility, 7(1), 98–109. https://doi.org/10.1108/jgr-01-2016-0001
- Walls, J. L., Berrone, P., & Phan, P. H. (2012). Corporate governance and environmental performance: Is there really a link? Strategic Management Journal, 33(8), 885–913. https://doi.org/10.1002/smj.1952
- Wang, H., Tong, L., Takeuchi, R., & George, G. (2016). Corporate social responsibility: An overview and new research directions. Academy of Management Journal, 59(2), 534–544. https://doi.org/10.5465/amj.2016.5001
- Watson, W. E., Kumar, K., & Michaelsen, L. K. (1993). Cultural diversity's impact on interaction process and performance: Comparing homogeneous and diverse task groups. Academy of Management Journal, 36(3), 590–602. https://doi.org/10.5465/256593
- Wijethilake, C. (2017). Proactive sustainability strategy and corporate sustainability performance: The mediating effect of sustainability control systems. Journal of Environmental Management, 196, 569–582. https://doi.org/10.1016/j.jenvman.2017.03.057
- Wijethilake, C., & Lama, T. (2018). Sustainability core values and sustainability risk management: Moderating effects of top management commitment and stakeholder pressure. Business Strategy and the Environment, 28(1), 143–154. https://doi.org/10.1002/bse.2245
- Wintoki, M. B., Linck, J. S., & Netter, J. M. (2012). Endogeneity and the dynamics of internal corporate governance. Journal of Financial Economics, 105(3), 581–606. https://doi.org/10.1016/j.jfineco.2012.03.005
- Yasser, Q. R., Al Mamun, A., & Ahmed, I. (2017). Corporate social responsibility and gender diversity: Insights from asia pacific. Corporate Social Responsibility and Environmental Management, 24(3), 210–221. https://doi.org/10.1002/csr.1400
- Zalata, A. M., Tauringana, V., & Tingbani, I. (2018). Audit committee financial expertise, gender, and earnings management: Does gender of the financial expert matter? International Review of Financial Analysis, 55, 170–183. https://doi.org/10.1016/j.irfa.2017.11.002
- Ziegler, A., & Schröder, M. (2010). What determines the inclusion in a sustainability stock index?. A panel data analysis for european firms. Ecological Economics, 69(4), 848–856. https://doi.org/10.1016/j.ecolecon.2009.10.009