Can board gender diversity promote corporate social performance?

Pages789-802
Date02 October 2017
Published date02 October 2017
DOIhttps://doi.org/10.1108/CG-09-2016-0183
AuthorKhine Kyaw,Mojisola Olugbode,Barbara Petracci
Subject MatterStrategy,Corporate governance
Can board gender diversity promote
corporate social performance?
Khine Kyaw, Mojisola Olugbode and Barbara Petracci
Khine Kyaw is Associate
Professor at NTNU
Business School,
Norwegian University of
Science and Technology,
Trondheim, Norway.
Mojisola Olugbode is
Lecturer at the University
of Plymouth, Plymouth,
UK. Barbara Petracci is
Associate Professor at
the Department of
Management, Universita
degli Studi di Bologna,
Bologna, Italy.
Abstract
Purpose This paper examines if gender diversity on corporate boards promotes corporate social
performance (CSP) across industries and across countries.
Design/methodology/approach Fixed-effect panel models are estimated using Europe-wide data
from 2002 through 2013. Instrumental variable estimation and propensity score matching are also used
to control for potential endogeneity.
Findings Board gender diversity (BGD) improves environmental and social performance and
consequently the CSP. Although the positive effect of gender diversity is prevalent across industries, the
effect is more pronounced for firms in emerging markets.
Practical implications The findings suggest that gender law that fosters gender diversity can
promote CSP in firms, and the benefit can be enjoyed with just an introduction of one female director to
the board. Promotion of gender diversity in Europe is most beneficial in emerging markets.
Originality/value The results provide new insights to the literature, as we find that a critical mass of
female directors on boards is not required to promote CSP. The research also highlights that BGD
enhances CSP irrespective of the industry, and the effect on CSP is more pronounced in emerging
markets where regulations regarding CSR are not so clear-cut.
Keywords Corporate social performance, Corporate governance, Propensity score matching,
Panel models, Board gender diversity
Paper type Research paper
1. Introduction
One of the European Union’s founding values is to foster equality between women and men
by promoting equal opportunities in corporate board representation and decision-making.
Countries such as Norway, Italy and Spain have already enforced legislations to promote
female representation in the boardrooms, while other countries such as the UK have issued
strong recommendations to increase female representation on the male-dominated
boardroom.
In the meantime, societal goals are appearing alongside economic goals (Carroll, 2000)
and corporations are expected to exhibit environmental ethics and social ethics while
maximizing shareholders’ wealth. We bring together these emerging themes by studying if
board gender diversity (BGD) promotes corporate social performance (CSP).
Resource dependence theory explains that firm performance is dependent upon the
resourcefulness of the corporation at the board level. Hillman and Dalziel (2003) describe
a corporate board as the source of critical resources for a firm in terms of advice, counsel
and addressing pressures from stakeholders. The board’s ability to provide critical
resources to the corporation that can enrich the strategic decision-making practice
depends on the collective experience and expertise of the board members (Bear et al.,
2010;Post et al., 2015). As female directors have different perspectives to CSP than male
directors (Burgess and Tharenou, 2002), BGD may enrich the board and broaden
JEL classification – G30, G38,
J16, M14
Received 13 September 2016
Revised 20 March 2017
Accepted 4 April 2017
DOI 10.1108/CG-09-2016-0183 VOL. 17 NO. 5 2017, pp. 789-802, © Emerald Publishing Limited, ISSN 1472-0701 CORPORATE GOVERNANCE PAGE 789

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