Looking Inside the Black Box: The Effect of Corporate Governance on Corporate Social Responsibility

21 Pages Posted: 25 Apr 2016

See all articles by Tanusree Jain

Tanusree Jain

ESADE Business School

Dima Jamali

American University of Beirut

Date Written: May 2016

Abstract

Manuscript Type. Review.

Research Question/Issue. This study provides a systematic multi‐level review of recent literature to evaluate the impact of corporate governance mechanisms (CG) at the institutional, firm, group, and individual levels on firm level corporate social responsibility (CSR) outcomes. We offer critical reflections on the current state of this literature and provide concrete suggestions to guide future research.

Research Findings/Insights. Focusing on peer‐reviewed articles from 2000 to 2015, the review compiles the evidence on offer pertaining to the most relevant CG mechanisms and their influence on CSR outcomes. At the institutional level, we focus on formal and informal institutional mechanisms, and at the firm level, we analyze the different types of firm owners. At the group level, we segregate our analysis into board structures, director social capital and resource networks, and directors' demographic diversity. At the individual level, our review covers CEOs' demography and socio‐psychological characteristics. We map the effect of these mechanisms on firms' CSR outcomes.

Theoretical/Academic Implications. We recommend that greater scholarly attention needs to be accorded to disaggregating variables and yet comprehending how multiple configurations of CG mechanisms interact and combine to impact firms' CSR behavior. We suggest that CG‐CSR research should employ a multi‐theoretical lens and apply sophisticated qualitative and quantitative methods to enable a deeper and finer‐grained analysis of the CG systems and their influence on CSR. Finally, we call for cross‐cultural research to capture the context sensitivities typical of both CG and CSR constructs.

Practitioner/Policy Implications. Our review suggests that for structural changes and reforms within firms to be successful, they need to be complemented by changes to the institutional makeup of the context in which firms function to encourage/induce substantive changes in corporate responsible behaviors.

Keywords: Corporate Governance, Corporate Social Responsibility, Corporate Social Performance, Corporate Environmental Performance, Multilevel Review

Suggested Citation

Jain, Tanusree and Jamali, Dima, Looking Inside the Black Box: The Effect of Corporate Governance on Corporate Social Responsibility (May 2016). Corporate Governance: An International Review, Vol. 24, Issue 3, pp. 253-273, 2016. Available at SSRN: https://ssrn.com/abstract=2769049 or http://dx.doi.org/10.1111/corg.12154

Tanusree Jain (Contact Author)

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

Dima Jamali

American University of Beirut ( email )

Beirut, 0236
Lebanon

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