Corporate social responsibility and shareholder support for corporate governance changes

Charles P. Cullinan, Lois S. Mahoney and Pamela Roush

Social Responsibility Journal, 2016, vol. 12, issue 4, 687-705

Abstract: Purpose - This paper examines whether shareholders consider corporate social responsibility (CSR) performance when voting on corporate governance change proposals submitted by dissident shareholders. These proposals recommend changes to the corporate governance status quo and are made by dissident shareholders who are dissatisfied with the company’s existing governance practices. Design/methodology/approach - Using 195 governance change proposals voted on during 2013, the paper examines the relationship between CSR performance (obtained from the MSCI database) and the level of voting support for these proposals. Findings - This study finds that shareholder support for corporate governance change proposals submitted by dissident shareholders ispositivelyrelated to firms’ CSR concerns, especially environmental concerns. Research limitations/implications - The findings suggest that shareholders may be concerned with the potentially adverse effects of weak CSR performance, especially poor environmental performance, and may support changes to corporate governance structures when a company’s CSR and environmental performance is weaker. Originality/value - As the first research to examine the relationship between CSR and proposed changes to corporate governance, this study provides unique insights into shareholder perceptions of the value of CSR based on shareholders’ support (or lack thereof) for governance changes proposed by dissident shareholders.

Keywords: Corporate social responsibility; Corporate governance; Dissidence; Shareholder voting (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:srjpps:v:12:y:2016:i:4:p:687-705

DOI: 10.1108/SRJ-10-2015-0161

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