It’s who you know that counts: Board connectedness and CSR performance

Amin, Abu, Chourou, Lamia, Kamal, Syed, Malik, Mahfuja and Zhao, Yang ORCID: 0000-0002-5018-6953 (2020) It’s who you know that counts: Board connectedness and CSR performance. Journal of Corporate Finance, 64. p. 101662.

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Official URL: http://dx.doi.org/10.1016/j.jcorpfin.2020.101662

Abstract

We examine whether and how board connections affect the firm's corporate social responsibilities (CSR). Grounded in the agency, resource dependence, and social network theory, our research predicts and finds that board connectedness is positively associated with CSR performance. This result is robust to a quasi-natural experiment, alternative measurement specifications, and an instrumental variable approach. Our findings suggest firms that operate in a complex business environment or require more advising (i.e. where demand for information is greater) benefit more from a well-networked board. Also, firms that are poorly governed, have high stock return volatility, low market capitalization, or low institutional ownership tend to benefit more from the well-connected board when the cost of acquiring information is higher. In addition, we show that independent directors’ abilities to gather information and resources from their networks can facilitate the transmission of information. Collectively, our study documents the informational advantage of a network as the predominant channel that allows a well-connected board to improve a firm's CSR performance.

Item Type:	Article
Uncontrolled Keywords:	Social network, Board connectedness, Corporate social responsibility
Depositing User:	Symplectic Admin
Date Deposited:	10 Jul 2020 07:36
Last Modified:	18 Jan 2023 23:46
DOI:	10.1016/j.jcorpfin.2020.101662
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3093451