Boards, Gender and Corporate Social Responsibility (CSR)

Author: Kathy Rao

Rao, Kathy, 2016 Boards, Gender and Corporate Social Responsibility (CSR), Flinders University, Flinders Business School

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Abstract

Corporate Social Responsibility (CSR) is an important concept for 21st Century businesses, but Australian firms are still lagging behind other countries in terms of CSR reporting. Examining corporate governance mechanisms, particularly boards of directors, who are largely considered to be responsible for developing CSR policies, is therefore of importance, not only for advancing knowledge, but also for policy development in Australia. Since CSR is voluntary and often considered to have long term benefits which are not necessarily quantifiable, decisions regarding CSR seem to be less certain and complex. In this sense, the alternative perspectives and in-depth discussion facilitated by diversity may be more beneficial when it comes to making CSR decisions at board level. This in turn could improve firms’ CSR outcomes. Further, within the board diversity literature, the issue of gender (the term ‘gender’, throughout of this thesis is considered as the proportion of women directors) has been extensively studied, with the majority of research indicating that women directors not only bring different perceptions to the board, but are also more sensitive towards communities and pay more attention to the welfare of stakeholders, suggesting that their presence could promote the company’s CSR. Notwithstanding this, there has been no research linking board diversity, including gender diversity, with CSR decision making processes; most research has only considered the board-CSR relationship using quantitative analysis of diversity variables. This thesis thereby aims to fill this knowledge gap and shed light on whether, and how, board diversity influences CSR reporting. Regression analysis using panel data is initially used to analyse the potential association between CSR disclosure and five important board diversity measures, specifically independence, tenure, gender, multiple directorships and an overall diversity measure. This is followed by a qualitative study where eight semi-structured interviews were conducted with board members of Australian profit sector companies to shed light on the relationship between board diversity, CSR and CSR reporting, so as to enhance the understanding of the link between the constructs. The findings show some evidence that there is a relationship between board diversity and CSR reporting. The modelling shows that three of the board diversity attributes (gender/proportion of women directors, tenure and multiple directorships) and the overall diversity measure seem to have the potential to influence CSR reporting. The relationship between independent/non-executive directors and CSR disclosure, however, is not clear. The results also indicate the existence of some possible interaction effects between gender and multiple directorships. Further, the interview data show that CSR is considered to be part of the normal business of boards, but highlights some important issues regarding how decisions about CSR issues are made. These include the relationship between board members and management, and how CSR activity is translated to reporting. Finally, and importantly, gender diversity appears to have the potential to influence CSR decisions at board level, but the interviews identified some of the potential barriers to women directors in making significant contributions.

Keywords: Boards, Corporate Social Responsibility, CSR, Gender, Diversity, Australia
Subject: Business thesis

Thesis type: Doctor of Philosophy
Completed: 2016
School: Flinders Business School
Supervisor: Prof. Carol Tilt