Boardroom Stewardship: Exploring Director Compensation, Integrity, and Social Responsibility

Suntharee Lhaopadchan, Pattarake Sarajoti and Sirimon Treepongkaruna

Corporate Social Responsibility and Environmental Management, 2025, vol. 32, issue 5, 6402-6415

Abstract: Relying on data from Thai listed firms over the period of 2015–2020, we explore the effect of outside director compensation on corporate social responsibility (CSR) and integrity, as measured by the Anti‐Corruption in Practice (ACRP) indicator, which captures the extent to which firms implement and disclose anti‐corruption measures. We find a statistically significant positive impact of outside director compensation on both CSR and ACRP in all models, while inside director compensation has an opposite impact with statistical significance in some models. Consistent with the stewardship hypothesis, highly compensated outside directors provide stronger oversight and better balance stakeholder interests, contributing to enhanced integrity and CSR outcomes. A one standard deviation increase in the pay for independent (non‐executive) directors increases CSR and ACRP by 17.85% (11.76%) and 14.65% (13.11%), respectively. In contrast, higher compensation for inside directors is associated with behavior aligned with the agency hypothesis. Our findings are robust after addressing endogeneity using panel fixed effects and two‐stage least squares regression approaches.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/csr.70039

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:wly:corsem:v:32:y:2025:i:5:p:6402-6415

Access Statistics for this article

More articles in Corporate Social Responsibility and Environmental Management from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().