Board Cultural Diversity and Corporate Social Responsibility Performance

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School of Business | Bachelor's thesis
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Authors

Date

2023

Department

Rahoituksen laitos

Major/Subject

Mcode

Degree programme

Rahoitus

Language

en

Pages

27 + 3

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Abstract

In this paper, I examine the relationship between board cultural diversity and corporate social responsibility (CSR) performance. As a measure of CSR performance, I use the arithmetic average of environmental and social pillar scores. I also analyze the relationships between board cultural diversity and both environmental and social pillar scores, separately. I use data of European public companies from 2012 to 2022 and construct a sample of 6889 firm-year observations from 1206 firms and 28 countries. The results suggest that enhancing board cultural diversity would not affect company CSR performance. The regressions indicate that there is a weak or insignificant relationship between board cultural diversity and CSR performance. The association between board cultural diversity and environmental pillar score is also weak and slightly negative. On the other hand, board cultural diversity is positively and significantly associated with social pillar score, before adding firm fixed effects to the model. However, the regression coefficients for board cultural diversity are small in all regressions in this paper. Therefore, the potential impact of board cultural diversity on social or environmental performance would be minor.

Description

Thesis advisor

Vihriälä, Erkki

Keywords

cultural diversity, corporate social responsibility, ESG, environmental pillar score, social pillar score

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https://urn.fi/URN:NBN:fi:aalto-202401281864

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[kand] Kauppakorkeakoulu / BIZ