B Corps - do network ties matter?

Abstract

Purpose: This study examines the interlocking directorates network for UK B Corps and investigates whether these firm interlock ties are associated with increased sustainably performance, as captured by the B Lab impact scores. Design/methodology/approach: When a director sits on the boards of directors of multiple firms, linkages are established between these firms which are referred to as director interlocks. This is used to create a network of firms' that are connected when they share a director. Resource dependency theory argues that firms benefit from these interlocks as they have access to additional sources of knowledge and resources. We draw on tools from Social Network Analysis to examine the association between a B Corp's sustainability performance is associated with its position in the interlock network. Findings: We find that firms that bridge structural holes, connecting otherwise disconnected firms, are associated with higher sustainability performance levels. Whilst simply having a high number of connections is not linked to a B Corps sustainability performance. Originality: This study takes a novel approach by considering the network ties of B Corps, examining how corporate linkages can impact B Lab scores, a proxy for sustainability behaviours, and the core part of the B Corp certification requirements.

Keywords: B Corps, Corporate Governance, Interlocking directorates, Social Network Analysis, Sustainability