Research in brief: Does boardroom gender diversity drive CSR engagement?
05/25/2023
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Recent *research from a team of international researchers has shown that a higher representation of female directors on a company’s board leads to an improved engagement in its socially responsible activities.
Many countries have introduced either legislation, governance codes or guidelines (outlining standards and practices) to encourage greater female representation in company boardrooms. Certain reforms set specific gender quota requirements (e.g., 40 % in Norway) which seek to force or at least pressure companies to hire more female directors.
Professor Tinghua DUAN from IÉSEG and his *coauthors Rong DING, Wenxuan HOU, Xianda LIU and Ziwei XU, recently studied the introduction of such reforms and their impact on the corporate social responsibility performance of more than 6,000 companies in over 60 countries.
The researchers find that firms in countries with gender diversity regulations experience a significant increase in CSR performance measuring by environmental and social rating score (ESG). The researchers further find that the impact on CSR activities was more pronounced in countries that had introduced legislative reforms rather than codes.
They also investigate the role of cultural biases towards gender equality – as measured by the UNDP Gender Social Norms Index – and find that impact of boardroom gender diversity on firm’s CSR engagement was stronger in countries with lower biases on gender equality and women’s empowerment.
How do female executives drive CSR activities?
In their article, the researchers note that social role theory may help explain how women are more effective in driving socially responsible activities. They note that previous research has shown for example that female directors tend to adopt a democratic and communal leadership style and are more likely to listen to the demands of stakeholders. It has also demonstrated that they tend to be more sensitive to ethical issues such as environmental violations.
More information is available in the full paper:
*“Do women drive corporate social responsibility? Evidence from diversity reforms around the world”, in the International Review of Law & Economics (December 2022) Rong DING (NEOMA Business School), Tinghua DUAN (IÉSEG School of Management, UMR 9221 – LEM) Wenxuan HOU(Shanghai Lixin University of Accounting and Finance) Xianda LIU (Institute of Finance and Banking, Chinese Academy of Social Sciences) Ziwei XU (Edinburgh University Business School).
September 2024: Please note that Tinghua DUAN no longer works at IESEG. This article was published during his time at the School.
