Board diversity and corporate social responsibility disclosure of multinational corporations

ABSTRACT

This study discovers the relationship between board diversity and corporate social responsibility (CSR) disclosure of multinational corporations (MNCs). The existing studies have shown the positive roles of board gender diversity (BGD), education background diversity (EBD), and tenure diversity (TD) in decision-making. Thus, we believe that the positive effect also exists in the strategic CSR decision-making process of the board of directors; it enhances corporate environmental disclosure (ED) and social disclosure (SD). After investigating 140 MNCs from China, Japan, the UK, and the US, the result shows that (1) BGD positively affects ED and SD of MNCs and (2) TD positively affects SD of MNCs. This study further explains the relationship between board diversity and CSR disclosure from the perspective of stakeholder and resource-based view, emphasizing the role of board diversity in stakeholder management and the effectiveness of CSR decision-making. The study helps provide policy makers with inspirations to improve CSR of MNCs by formulating policies related to board diversity. Our evidence also helps MNCs to develop the criteria for improving CSR strategy through board diversity.

KEYWORDS:

• Board diversity
• corporate social responsibility disclosure
• multinational corporations
• decision-making
• stakeholder

JEL CLASSIFICATION:

• M14
• G34

Acknowledgments

The authors gratefully acknowledge the helpful comments and suggestions of Mark P. Taylor (Editor) and anonymous reviewers.

Disclosure statement

The authors declare no conflicts of interest.

Notes

¹ According to https://databank.worldbank.org/, the US was the largest economy in 2017, followed by China and Japan; the UK is in 5th place.

² ‘0–2’ scoring system is used to measure the policy or regulations of MNCs; ‘0–4’ scoring system is used to measure the environmental indicators with quantitative data. (0 = no disclosure; 1 = brief disclosure; 2 = detailed disclosure; 3 = disclosure with quantitative data; 4 = quantitative disclosure with yearly data comparison)