Submitted Successfully!
To reward your contribution, here is a gift for you: A free trial for our video production service.
Thank you for your contribution! You can also upload a video entry or images related to this topic.
Version Summary Created by Modification Content Size Created at Operation
1 -- 1823 2023-07-14 18:09:43 |
2 layout + 5 word(s) 1828 2023-07-17 05:20:46 |

Video Upload Options

Do you have a full video?

Confirm

Are you sure to Delete?
Cite
If you have any further questions, please contact Encyclopedia Editorial Office.
Ji, Z.; Abdoune, R. CSR Disclosure and Women on Corporate Boards. Encyclopedia. Available online: https://encyclopedia.pub/entry/46826 (accessed on 18 June 2024).
Ji Z, Abdoune R. CSR Disclosure and Women on Corporate Boards. Encyclopedia. Available at: https://encyclopedia.pub/entry/46826. Accessed June 18, 2024.
Ji, Zhe, Radouane Abdoune. "CSR Disclosure and Women on Corporate Boards" Encyclopedia, https://encyclopedia.pub/entry/46826 (accessed June 18, 2024).
Ji, Z., & Abdoune, R. (2023, July 14). CSR Disclosure and Women on Corporate Boards. In Encyclopedia. https://encyclopedia.pub/entry/46826
Ji, Zhe and Radouane Abdoune. "CSR Disclosure and Women on Corporate Boards." Encyclopedia. Web. 14 July, 2023.
CSR Disclosure and Women on Corporate Boards
Edit

The promotion of women in the professional area, especially on corporate boards, has become an important issue for corporate governance. The growing numbers of regulations on board gender quotas motivate scholars to pay attention to gender diversity on corporate boards. Scholars argue that women have certain attributes, such as empathy, being helpful, and sensitivity, that make them prudent guardians of shareholder interest. Generally, empirical evidence finds women’s board membership is linked with mitigatory agency problems and improved firm performance.

CSR Governance Disclosure Performance Corporate Boards

1. Corporate Social Responsibility Disclosure and Performance

Stakeholder theory suggests that a firm’s survival and development are related to various groups of stakeholders that have distinct claims on the firm [1][2]. The corporate board is critical for corporate governance [3] and should prudently manage interdependent relationships with stakeholders. Scholars recognize the complexity and heterogeneity of stakeholder management, and that corporate social responsibility (CSR) is a critical approach to respond to stakeholder interests [4]. CSR creates positive synergies between the firm and its stakeholders and further increases its social capital [5]. Outstanding CSR performance was found to be associated with a better relationship with a diverse range of shareholders and enhanced firm financial performance [6]. Research on CSR has suggested stakeholder interest in CSR engagement could be identified through CSR disclosure and CSR performance [7]. CSR disclosure involves a firm’s willingness to practice and disclose environmental information in its relationship with its shareholders through different communication channels [8]. CSR performance typically encompasses the quality of information disclosed and the activities practiced.
CSR disclosure usually includes societal and environmental issues according to Global Reporting Initiative (GRI) guidelines and relates to transparency and the alleviation of information asymmetry in firms [9]. Firms disclose CSR information due to governance and potential economic interest [10]. A high CSR disclosure level is often treated as a signal of actual good CSR practices [7]. However, a firm’s effort in being transparent by disclosing CSR does not necessarily mean a commitment to sustainable behavior. Firms with poor reputations may choose to disclose more information to generate moral capital and to reduce potential resulting costs derived from legitimacy threats such as a corporate scandals [10][11]. By contrast, revealing everything to stakeholders in firms with a good reputation may be counter-productive to communication effectiveness as they are already perceived as legitimate constituents [12][13]. Thus, a firm with a good performance record may disclose less CSR information because investment in information disclosure creates less extra value for the firm [11][14]. Furthermore, CSR disclosure that could be considered greenwashing is occasionally not criticized because some of the firms are under different intensities of external pressure and might select and disclose only positive information while hiding negative information [11]. Thus, increasing the number of CSR disclosures may be treated as a positive signal based on the precondition of honesty and the unselected disclosure of organizational behavior. In this situation, it is practically and theoretically necessary to distinguish CSR disclosure from CSR practice. CSR performance does not assess whether an item has been disclosed but builds a series of standards to measure the extent of the disclosed information. In this situation, the essence of CSR is an issue of governance that is more than communication because it has greater influence [15]. CSR performance enables managers to gain greater commitment from stakeholders and increase their loyalty [16]. Thus, a better engagement of firms with CSR performance tends to be shown through a commitment to sustainable practices.
Some research demonstrates that some firms engage more with CSR disclosure than CSR performance, whereas other firms choose the opposite [17][18]. Directors in firms may strategically choose to disclose more CSR information or focus on performance and disclose less to avoid self-promotion. These strategic choices and trade-offs are usually made by corporate boards. However, under which conditions these decisions are made is less explored. Trade-offs by directors in balancing CSR disclosure and performance remain an underexplored but important area to be unpacked. It is worth noting that women are thought to have more communal attributes [19] and are better at managing relationships with a wide range of shareholders [20] than their men counterparts. They may have particular value in the process of director trade-offs. In emerging economies where institutional environments are weak, foreign experience is found to improve firm performance [21]. Hence, researchers' study aims to fill this research gap by examining how the foreign background of women directors prioritizes the claims of different stakeholders.

2. Women on Corporate Boards: From Upper Echelon Theory to Social Role Theory

Upper echelon theory indicates that decisions made and practices adopted by an organization can be traced to the characteristics of the top management team [22]. Inspection of the literature provides clear evidence that the demographic heterogeneity of the top management has an impact on firms’ strategic decisions, organizational behavior, and performance [23][24]. Especially in complex strategic situations, only bounded rationality limits the decisions of the directors on the board within their cognitive frames [25]. When it comes to CSR, directors’ personal ethics are related to specific demographic attributes and further influence their organizational socially responsible values and preferences [20]. In economies where firms have less-effective governance mechanisms, CSR is less promised at the level of policy and relies more significantly on the individual ethics of directors [26]. Among all features of directors, the literature emphasizes the importance of gender: female directors have considerable influence on firm performance, especially in terms of financial output [27][28][29]. Despite scholars of upper echelon theory making headway on the topic of director characteristics and cognition [30], the impact of gender differences on CSR remains at an explanatory stage [20], especially considering that little research has synthetically reviewed different characteristics, such as gender and foreign background.
Unlike other demographic attributes, such as education, expertise, and reputation, which are usually studied in the literature [23][27][31], gender is a specific innate feature of a board of directors. A growing number of studies have recognized the importance of gender in affecting CSR, especially in the context of relatively weak governance, such as in emerging economies [20][32]. Gender differences based on social roles offer an appropriate theoretical lens to examine the CSR implications of board gender diversity. Social role theory [33] states that individuals are given certain roles that attach specific behavioral expectations, stereotypes, and allowed forms of behavior [34], and the gender role is one of the most significant roles in society. Women and men may behave consciously or unconsciously in ways that are consistent with prevailing social stereotypes and expectations because departure from expected behaviors could possibly lead to social sanctions against them [35]. This is even more significant for boards of directors because reputation is essential for future board membership [36]. The literature on this research stream indicates that women are more likely to be expected to show communal attributes than their male counterparts, including being selfless, inclusive, benevolent, and collectively oriented [37][38]. These attributes of women are in line with CSR requirements, which tend to make women competent in CSR-related issues. Additionally, women directors are likely to self-impose compliance with female gender role stereotypes when dealing with CSR [19]. In particular, prejudices and stereotypes regarding women’s competencies, family duties, and professional choices are deeply entrenched in the societies of emerging economies [39][40][41]. In this situation, women often carry the pressure to adopt socially oriented behavior and to make sustainable commitments. Hence, attributes based on gender differences are likely to be of particular value for CSR in emerging economies such as China.

3. Foreign Directors on Corporate Boards: A Neo-Institutional Perspective

Neo-institutional theory, which originated in the field of organizational sociology, suggests that organizational action is based on a set of realized patterns, models, and cultural schemes [42]. It focuses on homogeneity within an organizational field where there are prevailing approaches and forms. Institutional isomorphism changes occur through the mechanisms of coercive, mimetic, and normative actions [43]. Coercive isomorphism results from pressures exerted by outside organizations on which an organization depends and leads to the homogenization of organizational structures. Mimetic isomorphism occurs because of uncertainty when organizations model themselves on existing forms that are legitimate or successful to reduce the risk caused by uncertainty. Normative isomorphism stems from professionalization, which creates similar cognition in personnel that spreads across professional networks. Existing studies on CSR contend that firms in countries with similar institutional environments have similarities in CSR actions due to mimetic isomorphism [44][45]. In the context where there are strong laws or regulations, firms tend to be more active in certain CSR-related issues, aiming to obtain legitimacy through coercive isomorphism [46]. Another example of coercive isomorphism is when foreign subsidiaries strongly depend on their parent companies and are therefore more likely to adopt similar CSR activities to their parent companies [47].
Although scholars have realized the importance of institutional theory in CSR practice, the role of institutions has not been given adequate attention [48]. Most of the current research explains firm CSR engagement from the perspective of legitimacy using neo-institutional theory [49][50], whereas other aspects of CSR isomorphism processes across organizations, such as people, have been neglected. Neo-institutional theory emphasizes the role of informal institutions in forming organizational activities. In particular, informal institutional factors perform a more obvious role in environments less protected by formal institutions, such as in emerging economies [51][52]. In the three mechanisms of institutional isomorphism [43], the professionalization of normative processes results in individuals who share similar cognitive bases and dispositions. Directors in emerging economies who have gained foreign experience may acquire similar perceptions of CSR to their counterparts in developed economies. Additionally, employee transfers from developed economies facilitate the mimetic processes and model diffusion through the corporate network, which could offer a theoretical framework for explaining the homogeneity of CSR engagement in developed and emerging economies. Therefore, this research aims to fill this gap by exploring the foreign background of boards of directors.
In summary, although upper echelon theory has been shown to meaningfully explain the importance of management characteristics, such as gender, on CSR activities, this theory alone cannot adequately respond to why certain demographic attributes make a difference in CSR practice. Social role theory could be an addition to upper echelon theory that further supports the influences of gender differences on corporate decision-making processes and CSR activities. Neo-institutional theory suggests that directors who obtain professional experience abroad are better able to promote CSR engagement when they return to work with local firms. However, a single theory cannot adequately explain why women on boards of directors make better decisions in balancing CSR disclosure and CSR performance. In comparison, stakeholder theory offers a strategic approach to understanding the trade-offs between CSR disclosure and CSR performance. As stakeholder theory suggests, different stakeholders have divergent objectives and claims that place distinct demands on resource allocation, managerial attention, and strategic priorities [53][54], suggesting that women directors with a foreign background may not only promote CSR activities but also adopt CSR disclose and performance strategies that balance the varied interests of different stakeholders. In this situation, it is necessary to integrate stakeholder theory with social role theory and neo-institutional theory to develop theoretical arguments that pertain to the impact of a foreign background of women directors on CSR engagement in the context of emerging economies.

References

  1. Friedman, A.L.; Miles, S. Stakeholders: Theory and Practice; OUP Oxford: Oxford, UK, 2006; ISBN 978-0-19-153355-6.
  2. Neville, B.A.; Menguc, B. Stakeholder Multiplicity: Toward an Understanding of the Interactions between Stakeholders. J. Bus. Ethics 2006, 66, 377–391.
  3. Tao, Q.; Wei, K.C.J.; Xiang, X.; Yi, B. Board of directors’ Foreign Experience and Firm Dividend Payouts. J. Corp. Financ. 2022, 75, 102237.
  4. Lane, A.B.; Devin, B. Operationalizing Stakeholder Engagement in CSR: A Process Approach. Corp. Soc. Responsib. Environ. Manag. 2018, 25, 267–280.
  5. Fernández Sánchez, J.L.; Luna Sotorrío, L.; Baraibar Diez, E. The Relationship between Corporate Social Responsibility and Corporate Reputation in a Turbulent Environment: Spanish Evidence of the Ibex35 Firms. Corp. Gov. 2015, 15, 563–575.
  6. Cho, S.J.; Chung, C.Y.; Young, J. Study on the Relationship between CSR and Financial Performance. Sustainability 2019, 11, 343.
  7. Ullmann, A.A. Data in Search of a Theory: A Critical Examination of the Relationships Among Social Performance, Social Disclosure, and Economic Performance of U.S. Firms. Acad. Manag. Rev. 1985, 10, 540–557.
  8. Campbell, D. A Longitudinal and Cross-Sectional Analysis of Environmental Disclosure in UK Companies—A Research Note. Br. Account. Rev. 2004, 36, 107–117.
  9. Bernardi, C.; Stark, A.W. Environmental, Social and Governance Disclosure, Integrated Reporting, and the Accuracy of Analyst Forecasts. Br. Account. Rev. 2018, 50, 16–31.
  10. Gamerschlag, R.; Möller, K.; Verbeeten, F. Determinants of Voluntary CSR Disclosure: Empirical Evidence from Germany. Rev. Manag. Sci. 2011, 5, 233–262.
  11. Lyon, T.P.; Maxwell, J.W. Greenwash: Corporate Environmental Disclosure under Threat of Audit. J. Econ. Manag. Strategy 2011, 20, 3–41.
  12. Morsing, M.; Schultz, M. Corporate Social Responsibility Communication: Stakeholder Information, Response and Involvement Strategies. Bus. Ethics Eur. Rev. 2006, 15, 323–338.
  13. Kim, S.; Ferguson, M.A.T. Dimensions of Effective CSR Communication Based on Public Expectations. J. Mark. Commun. 2018, 24, 549–567.
  14. Jeriji, M.; Louhichi, W. The Relationship between Poor CSR Performance and Hard, Negative CSR Information Disclosures. Sustain. Account. Manag. Policy J. 2020, 12, 410–436.
  15. McWilliams, A.; Siegel, D.S. Creating and Capturing Value: Strategic Corporate Social Responsibility, Resource-Based Theory, and Sustainable Competitive Advantage. J. Manag. 2011, 37, 1480–1495.
  16. Flammer, C. Does Corporate Social Responsibility Lead to Superior Financial Performance? A Regression Discontinuity Approach. Manag. Sci. 2015, 61, 2549–2568.
  17. Font, X.; Walmsley, A.; Cogotti, S.; McCombes, L.; Häusler, N. Corporate Social Responsibility: The Disclosure–Performance Gap. Tour. Manag. 2012, 33, 1544–1553.
  18. Wang, Z.; Hsieh, T.-S.; Sarkis, J. CSR Performance and the Readability of CSR Reports: Too Good to Be True? Corp. Soc. Responsib. Environ. Manag. 2018, 25, 66–79.
  19. Boulouta, I. Hidden Connections: The Link Between Board Gender Diversity and Corporate Social Performance. J. Bus. Ethics 2013, 113, 185–197.
  20. Jin, R.; Jiang, X.; Hu, H.W. Internal and External CSR in China: How Do Women Independent Directors Matter? Asia Pac. J. Manag. 2021, 40, 169–204.
  21. Giannetti, M.; Liao, G.; Yu, X. The Brain Gain of Corporate Boards: Evidence from China. J. Financ. 2015, 70, 1629–1682.
  22. Hambrick, D.C.; Mason, P.A. Upper Echelons: The Organization as a Reflection of Its Top Managers. Acad. Manage. Rev. 1984, 9, 193–206.
  23. Liu, Y.; Wei, Z.; Xie, F. Do Women Directors Improve Firm Performance in China? J. Corp. Financ. 2014, 28, 169–184.
  24. Beji, R.; Yousfi, O.; Loukil, N.; Omri, A. Board Diversity and Corporate Social Responsibility: Empirical Evidence from France. J. Bus. Ethics 2021, 173, 133–155.
  25. Cannella, A.A.; Holcomb, T.R. A Multi-Level Analysis of the Upper-Echelons Model. In Multi-Level Issues in Strategy and Methods; Dansereau, F., Yammarino, F.J., Eds.; Research in Multi-Level Issues; Emerald Group Publishing Limited: Bingley, UK, 2005; Volume 4, pp. 195–237. ISBN 978-1-84950-330-3.
  26. Elango, B.; Paul, K.; Kundu, S.K.; Paudel, S.K. Organizational Ethics, Individual Ethics, and Ethical Intentions in International Decision-Making. J. Bus. Ethics 2010, 97, 543–561.
  27. Bennouri, M.; Chtioui, T.; Nagati, H.; Nekhili, M. Female Board of directorship and Firm Performance: What Really Matters? J. Bank. Financ. 2018, 88, 267–291.
  28. Ain, Q.U.; Yuan, X.; Javaid, H.M.; Usman, M.; Haris, M. Female Directors and Agency Costs: Evidence from Chinese Listed Firms. Int. J. Emerg. Mark. 2020; ahead-of-print.
  29. Green, C.P.; Homroy, S. Female Directors, Board Committees and Firm Performance. Eur. Econ. Rev. 2018, 102, 19–38.
  30. Neely, B.H.; Lovelace, J.B.; Cowen, A.P.; Hiller, N.J. Metacritiques of Upper Echelons Theory: Verdicts and Recommendations for Future Research. J. Manag. 2020, 46, 1029–1062.
  31. Brahma, S.; Nwafor, C.; Boateng, A. Board Gender Diversity and Firm Performance: The UK Evidence. Int. J. Finance Econ. 2021, 26, 5704–5719.
  32. Katmon, N.; Mohamad, Z.Z.; Norwani, N.M.; Farooque, O.A. Comprehensive Board Diversity and Quality of Corporate Social Responsibility Disclosure: Evidence from an Emerging Market. J. Bus. Ethics 2019, 157, 447–481.
  33. Eagly, A.H. Sex Differences in Social Behavior: A Social-Role Interpretation; Psychology Press: New York, NY, USA, 1987; ISBN 978-0-203-78190-6.
  34. Koenig, A.M.; Eagly, A.H. Evidence for the Social Role Theory of Stereotype Content: Observations of Groups’ Roles Shape Stereotypes. J. Pers. Soc. Psychol. 2014, 107, 371–392.
  35. Brooks, G.R.; Good, G.E. The New Handbook of Psychotherapy and Counseling with Men: A Comprehensive Guide to Settings, Problems, and Treatment Approaches; Jossey-Bass/Wiley: Hoboken, NJ, USA, 2001; Volumes 1–2, 888p, ISBN 978-0-7879-5606-6.
  36. Masulis, R.W.; Mobbs, S. Independent Director Incentives: Where Do Talented Directors Spend Their Limited Time and Energy? J. Financ. Econ. 2014, 111, 406–429.
  37. Rao, K.; Tilt, C. Board Composition and Corporate Social Responsibility: The Role of Diversity, Gender, Strategy and Decision Making. J. Bus. Ethics 2016, 138, 327–347.
  38. Wood, W.; Eagly, A.H. Chapter Two—Biosocial Construction of Sex Differences and Similarities in Behavior. In Advances in Experimental Social Psychology; Olson, J.M., Zanna, M.P., Eds.; Academic Press: Cambridge, MA, USA, 2012; Volume 46, pp. 55–123. ISBN 0065-2601.
  39. Zhu, X.; Cooke, F.L.; Chen, L.; Sun, C. How Inclusive Is Workplace Gender Equality Research in the Chinese Context? Taking Stock and Looking Ahead. Int. J. Hum. Resour. Manag. 2022, 33, 99–141.
  40. Mukarram, S.S.; Saeed, A.; Hammoudeh, S.; Raziq, M.M. Women on Indian Boards and Market Performance: A Role-Congruity Theory Perspective. Asian Bus. Manag. 2018, 17, 4–36.
  41. Taser-Erdogan, D. Careers Advancement of Women: Applying a Multi-Level Relational Perspective in the Context of Turkish Banking Organisations. Hum. Relat. 2022, 75, 1053–1083.
  42. Meyer, J.W.; Rowan, B. Institutionalized Organizations: Formal Structure as Myth and Ceremony. Am. J. Sociol. 1977, 83, 340–363.
  43. DiMaggio, P.J.; Powell, W.W. The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. Am. Sociol. Rev. 1983, 48, 147.
  44. Chen, X.; Wan, P. Social Trust and Corporate Social Responsibility: Evidence from China. Corp. Soc. Responsib. Environ. Manag. 2020, 27, 485–500.
  45. Martínez-Ferrero, J.; García-Sánchez, I.-M. Coercive, Normative and Mimetic Isomorphism as Determinants of the Voluntary Assurance of Sustainability Reports. Int. Bus. Rev. 2017, 26, 102–118.
  46. Buhmann, K. Corporate Social Responsibility: What Role for Law? Some Aspects of Law and CSR. Corp. Gov. Int. J. Bus. Soc. 2006, 6, 188–202.
  47. Yang, X.; Rivers, C. Antecedents of CSR Practices in MNCs’ Subsidiaries: A Stakeholder and Institutional Perspective. J. Bus. Ethics 2009, 86, 155–169.
  48. Brammer, S.; Jackson, G.; Matten, D. Corporate Social Responsibility and Institutional Theory: New Perspectives on Private Governance. Socio-Econ. Rev. 2012, 10, 3–28.
  49. Shahab, Y.; Ye, C. Corporate Social Responsibility Disclosure and Corporate Governance: Empirical Insights on Neo-Institutional Framework from China. Int. J. Discl. Gov. 2018, 15, 87–103.
  50. Chedrawi, C.; Osta, A.; Osta, S. CSR in the Lebanese Banking Sector: A Neo-Institutional Approach to Stakeholders’ Legitimacy. J. Asia Bus. Stud. 2020, 14, 143–157.
  51. Berrone, P.; Duran, P.; Gómez-Mejía, L.; Heugens, P.P.M.A.R.; Kostova, T.; van Essen, M. Impact of Informal Institutions on the Prevalence, Strategy, and Performance of Family Firms: A Meta-Analysis. J. Int. Bus. Stud. 2020, 53, 1153–1177.
  52. North, D.C. Institutions, Institutional Change and Economic Performance; Political Economy of Institutions and Decisions; Cambridge University Press: Cambridge, UK, 1990; ISBN 978-0-521-39416-1.
  53. Luo, X.R.; Wang, D.; Zhang, J. Whose Call to Answer: Institutional Complexity and Firms’ CSR Reporting. Acad. Manag. J. 2017, 60, 321–344.
  54. Thornton, P.H.; Ocasio, W.; Lounsbury, M. The Institutional Logics Perspective: A New Approach to Culture, Structure and Process; OUP Oxford: Oxford, UK, 2012; ISBN 978-0-19-105736-6.
More
Information
Subjects: Management
Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register : ,
View Times: 202
Revisions: 2 times (View History)
Update Date: 17 Jul 2023
1000/1000
Video Production Service