CSR Performance: Governance Insights from Dual-Class Firms
Research on Professional Responsibility and Ethics in Accounting
ISBN: 978-1-83867-670-4, eISBN: 978-1-83867-669-8
Publication date: 16 October 2020
Abstract
The authors’ examination of corporate social responsibility (CSR) scores in dual-class firms provides a window on firms’ CSR performance when insulated from external pressure. Dual-class ownership confers greater voting rights on a superior class of shares held by insiders; consequently, managers of dual-class firms are insulated from external pressure from inferior class shareholders and, potentially, from society. The authors compare CSR scores in dual- and single-class firms and investigate the association between CSR scores and cash flow rights in dual-class firms. This analysis reveals that dual-class firms have lower CSR scores than their single-class counterparts and that CSR scores in dual-class firms are positively related to the relative cost of CSR borne by the superior class of shares. The findings suggest that external accountability encourages CSR performance, and CSR performance is higher when the superior class bears a smaller portion of the cost of CSR activities. It follows that the analysis suggests the importance of governance structures for encouraging CSR, and the dampening impact of cost to CSR performance.
Keywords
Acknowledgements
Acknowledgments
We wish to express our appreciation to the financial support of the CPA-Schulich Research Fund, and acknowledge the insights from workshops at Simon Fraser University and University of Ottawa, as well as the Public Interest Annual Meeting, CSEAR, CAAA, and the Multinational Finance Society Conference. Finally, we would like to express thanks for guidance obtained from Dr. Walid Ben Amar.
Citation
Cullinan, C.P., Mahoney, L.B. and Thorne, L. (2020), "CSR Performance: Governance Insights from Dual-Class Firms", Baker, C.R. (Ed.) Research on Professional Responsibility and Ethics in Accounting (Research on Professional Responsibility and Ethics in Accounting, Vol. 23), Emerald Publishing Limited, Leeds, pp. 23-46. https://doi.org/10.1108/S1574-076520200000023002
Publisher
:Emerald Publishing Limited
Copyright © 2020 Emerald Publishing Limited