Corporate Governance and Corporate Social Performance: The Influence of Boards, Ownership and Institutions

Abstract

We analyze how ownership concentration and type, and board independence are related to corporate social performance (CSP). Drawing from agency, team production and stakeholder perspectives, we argue that the distribution of costs and benefits to shareholders and other stakeholders is crucial to understand what drives CSP. We analyze an international panel of listed firms and reveal that CSP is negatively related to ownership concentration, but positively to board independence. Furthermore, the ownership type and the business context matter. Ownership concentration is negatively related to CSP more strongly in shareholder-oriented societies. This negative relationship is weaker in egalitarian societies.

Keywords: corporate governance, corporate social performance, responsibility, agency theory, stakeholder theory, ownership, boards, institutions

JEL Classification: A13, G3, M0, M1, M14, M4, M41