Board Nationality Diversity and Corporate Social Responsibility

36 Pages Posted: 11 Oct 2018

See all articles by Maretno A. Harjoto

Maretno A. Harjoto

Pepperdine University - Pepperdine Graziadio Business School (PGBS)

Indrarini Laksmana

Kent State University - Department of Accounting

Ya-Wen Yang

Wake Forest University - Schools of Business

Date Written: September 19, 2018

Abstract

The study examines the relation between the nationality and educational background diversity of directors serving on corporate boards and the firms’ corporate social responsibility (CSR). We measures nationality diversity by directors’ national citizenship and educational background diversity by countries from which they earned their undergraduate and post undergraduate degrees. It measures firms’ CSR from the MSCI ESG ratings. Using a sample of U.S. firms, we find that having greater board nationality diversity and educational background diversity are positively associated with CSR. Our findings suggest that improving director nationality diversity and educational background diversity could improve firms’ social performance. Our study also shows that the increasing trend of foreign nationals in the U.S. boards could shift the focus of U.S. corporations to be more stakeholder-oriented.

Keywords: Board Nationality, Board Educational Background, Corporate Social Responsibility, Board Diversity

JEL Classification: M14, G34, G39, J1

Suggested Citation

Harjoto, Maretno Agus and Laksmana, Indrarini and Yang, Ya-Wen, Board Nationality Diversity and Corporate Social Responsibility (September 19, 2018). Available at SSRN: https://ssrn.com/abstract=3252114 or http://dx.doi.org/10.2139/ssrn.3252114

Maretno Agus Harjoto (Contact Author)

Pepperdine University - Pepperdine Graziadio Business School (PGBS) ( email )

Drescher Campus Suite 344
24255 Pacific Coast Highway
Malibu, CA 90263
United States
(310) 506-8542 (Phone)
(310) 506-4126 (Fax)

HOME PAGE: http://scholar.google.com/citations?hl=en&user=9-PfQi0AAAAJ

Indrarini Laksmana

Kent State University - Department of Accounting ( email )

P.O. Box 5190
Kent, OH 44242-0001
United States

Ya-Wen Yang

Wake Forest University - Schools of Business ( email )

P.O. Box 7659
Winston-Salem, NC 27109-7285
United States
336-758-2934 (Phone)

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