Corporate Social Responsibility and Sustainability Committee Inside the Board

30 Pages Posted: 4 May 2013

See all articles by Ignacio Danvila del Valle

Ignacio Danvila del Valle

Universidad Complutense de Madrid (UCM)

Jose Maria Diez Esteban

University of Burgos

Oscar Lopez de Foronda Péres

University of Burgos - Department of Business and Management

Date Written: May 3, 2013

Abstract

Type: Empirical.

Research Question/Issue: This study examines whether the existence of a sustainability committee with independent directors facilitates the requirements of the Dow Jones Sustainability Index to include the company with the leading sustainability companies in the world.

Research Findings/Insights: We use firm-level data for 469 European firms from EUROSTOXX500 for 2010. We find that the existence of a sustainability committee increases the likelihood that a large European firm could be included in the Dow Jones Sustainability Index (DJSI), which serves as a way to measure the quality of a firm’s CSR strategy and to identify leading CSR companies.

Theoretical/Academic Implications: This study develops and tests notions related to how the CSR policies are driven adequately by the board. This study provides empirical support for the necessary role of the sustainability committee formed by independent directors with CSR knowledge to orientate the corporate governance to the interest of all stakeholders.

Practitioner/Policy Implications: This study offers a tool for the boards of firms to adopt CSR policies. Furthermore, our study helps stakeholders to direct their efforts to increase the independence of board to pursue the objective of the firm according to CSR perception. It also provides a perspective for executives and investment managers of multinational firms to follow the recommendations of good practices in corporate governance with the goal of becoming a member of the select club of DJSI, which includes the leading sustainability companies in the world.

Keywords: Sustainability Committee, Corporate Governance, Corporate Social Responsibility, Independent Directors

JEL Classification: M14, O16, G32

Suggested Citation

Danvila del Valle, Ignacio and Diez Esteban, Jose Maria and Péres, Oscar Lopez de Foronda, Corporate Social Responsibility and Sustainability Committee Inside the Board (May 3, 2013). Available at SSRN: https://ssrn.com/abstract=2260382 or http://dx.doi.org/10.2139/ssrn.2260382

Ignacio Danvila del Valle

Universidad Complutense de Madrid (UCM) ( email )

Carretera de Humera s/n
Madrid, Madrid 28223
Spain

Jose Maria Diez Esteban (Contact Author)

University of Burgos ( email )

Hospital del Rey, s/n
Burgos, 09001
Spain

Oscar Lopez de Foronda Péres

University of Burgos - Department of Business and Management ( email )

Burgos
Spain

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