Corporate governance and corporate social responsibility

Corporate governance and corporate social responsibility
In recent decades, the field of corporate governance has increasingly recognized corporate social responsibility (CSR)—the responsibility of firms to serve the interests of a broader set of stakeholders beyond their shareholders—as an important part of the corporate goal. This dissertation includes three empirical studies that are designed to advance our knowledge about the role of corporate governance in shaping a firm’s CSR practices. Findings from these studies highlight two issues regarding the intersection between corporate governance and CSR. First, in some cases, corporate governance mechanisms that should stimulate socially responsible behavior merely play a symbolic role. As demonstrated in Chapter 2, NGO directors are more prevalent among firms with lower prior year CSR performance. Yet, their presence on boards is not associated with subsequent improvements in CSR performance. Second, institutions manifest their influence on the relationship between corporate governance mechanisms and CSR over time and across space. Chapter 3 explores the time dimension, revealing that transient institutional investors and quasi-indexers have become more important in reducing executive-to-worker pay dispersion as this issue becomes more salient since the 2007-2008 financial crisis. Chapter 4 focuses on the space dimension and shows that the effectiveness of board gender diversity policies in increasing women on boards varies across countries due to the different legislative, cultural, and economic institutions.