Board demographic diversity, independence, and corporate social performance

Abstract

Purpose

Drawing on agency theory and resource dependence theory, the study aims to link board demographic diversity and independence to corporate social performance.

Design/methodology/approach

Data were collected from various sources for a sample of 475 publicly traded Fortune 500 companies between the years 2007 and 2008.

Findings

It is found that board gender diversity is positively related to institutional and technical strength ratings, while board racial diversity is positively related to institutional strength rating only. Both the proportion of outside directors and CEO non‐duality were negatively associated with institutional and technical weakness ratings.

Research limitations/implications

The sample was predominantly large, publicly traded national and international corporations, which might limit the generalizability of the findings.

Practical implications

Management personnel should be cognizant of how board configurations and leadership structure may influence their corporate reputation for social responsibility. Efforts should be made to foster a group dynamic that is conducive to effective board functioning.

Originality/value

Few empirical studies have examined the relationship between board characteristics and corporate social performance. This study contributes to the literature by examining such associations.

Citation

Zhang, L. (2012), "Board demographic diversity, independence, and corporate social performance", Corporate Governance, Vol. 12 No. 5, pp. 686-700. https://doi.org/10.1108/14720701211275604