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

We systematically analyze how variations in board independence and ownership concentration and type affect corporate social performance (CSP). Drawing from the agency and stakeholder perspectives, we argue that recognizing differences in the distribution of costs and benefits to shareholders and other stakeholders is crucial to understand what drives CSP. We analyze a large panel of listed firms from around the world and reveal that CSP is positively associated with board independence, but negatively with ownership concentration. We also reveal that the ownership type matters. A key contribution is that we consistently show that firm-level results depend on the business context. Results confirm that CSP is negatively affected more strongly by ownership concentration in settings where formal rules and regulations emphasize the relative importance of shareholders over other stakeholders. However, in the presence of strong informal institutional pressures towards egalitarianism, large owners exercise less pressure to reduce CSP activities.