Do Old Board Directors Promote Corporate Social Responsibility?

Han-Hsing Lee (), Woan-lih Liang (), Quynh-Nhu Tran () and Quang-Thai Truong ()
Additional contact information
Han-Hsing Lee: National Yang Ming Chiao Tung University
Woan-lih Liang: National Yang Ming Chiao Tung University
Quynh-Nhu Tran: National Taiwan University
Quang-Thai Truong: National Taipei University

Journal of Business Ethics, 2024, vol. 195, issue 1, No 4, 67-93

Abstract: Abstract This study investigates the influence of old directors on corporate social responsibility (CSR) using roughly 25,000 firm-year observations from 2001 to 2015 in the United States. We employ the widely used selection, optimization, and compensation (SOC) model from psychology to explain the CSR decisions of old directors. Our results indicate that firms with a higher percentage of old directors tend to have lower engagement in CSR activities. To address endogeneity, we adopt the difference-in-differences method and use the event of sudden deaths and unexpected retirements of old directors and find that our results remain robust. Our analysis also reveals that the negative impact of old directors on CSR is more significant in firms where directors receive fewer reputational spillover benefits from CSR initiatives and/or firms exhibiting poor corporate governance. In addition, this adverse impact of old directors comes from two effects: a reduction in efforts to enhance CSR strengths and an increase in inaction to address CSR concerns. Overall, these findings suggest that the CSR decision-making process of old directors involves assessing the costs and benefits of CSR engagements, consistent with our hypothesis derived from the SOC model.

Keywords: Corporate social responsibility; Board of directors; Corporate governance; Selection; optimization; and compensation theory; Socioemotional selectivity theory (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10551-024-05681-4 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:195:y:2024:i:1:d:10.1007_s10551-024-05681-4

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-024-05681-4

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().