The relationship among board of director characteristics, corporate social performance and corporate financial performance

Paul Dunn and Barbara Sainty

International Journal of Managerial Finance, 2009, vol. 5, issue 4, 407-423

Abstract: Purpose - The purpose of this paper is to investigate the link between qualitative measures of a firm's Board of Directors and its corporate social performance (CSP). Design/methodology/approach - CSP is a function of qualitative measures of a firm's Board of Directors, as well as firm risk and financial performance. A longitudinal sample of 104 Canadian firms is used. Findings - Board independence is positively related to social performance but shareholder orientation is not. In addition, a positive relationship between social performance with both financial performance and debt is found. Research limitations/implications - Although the sample is small and restricted to Canadian firms, the results are quite robust. Future studies should consider using qualitative measures on a larger international sample of firms. Originality/value - This paper uses qualitative measures – the degree of independence of the Board and the Board's level of shareholder orientation – to examine the interrelationship between a firm's Board of Directors and its CSP.

Keywords: Boards of Directors; Corporate social responsibility; Financial performance; Canada (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmfpp:v:5:y:2009:i:4:p:407-423

DOI: 10.1108/17439130910987558

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