Corporate Social Responsibility Committee: International Evidence

64 Pages Posted: 28 May 2024

See all articles by Jenny Chu

Jenny Chu

University of Cambridge - Judge Business School

Xi Li

London School of Economics; European Corporate Governance Institute (ECGI)

Yuxia (Sarine) Zou

Nanyang Business School, Nanyang Technological University

Date Written: May 24, 2024

Abstract

We provide worldwide large-sample evidence of a recent innovation in corporate governance: the voluntary creation of a separate board committee to oversee corporate social responsibility (CSR) activities. Our evidence suggests that a firm’s decision to voluntarily adopt a CSR committee is shaped by external demands from shareholders and other stakeholders, as well as internal needs and costs associated with forming a separate CSR committee. Upon the formation of CSR committees, firms enhance their internal CSR management practices and experience improvements in future environmental and social outcomes. Notably, the environmental improvements are more pronounced among firms operating in industries where environmental concerns are material and in countries with stronger environmental efforts. Overall, our evidence suggests that CSR committees represent a substantive corporate governance mechanism in improving firms’ environmental and social impact.

Keywords: corporate social responsibility (CSR), CSR committee, board, corporate governance, stakeholder, regulation.

JEL Classification: G34, M14, M41

Suggested Citation

Chu, Jenny and Li, Xi and Zou, Yuxia, Corporate Social Responsibility Committee: International Evidence (May 24, 2024). European Corporate Governance Institute – Finance Working Paper No. 984/2024, Nanyang Business School Research Paper No. 24-11, Available at SSRN: https://ssrn.com/abstract=4845058 or http://dx.doi.org/10.2139/ssrn.4845058

Jenny Chu

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

Xi Li

London School of Economics ( email )

Department of Accounting
Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://www.lse.ac.uk/accounting/people/xi-li

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.global/network/our-members/xi-li

Yuxia Zou (Contact Author)

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore

HOME PAGE: http://https://dr.ntu.edu.sg/cris/rp/rp02186

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