The impact of board traits on the social performance of Canadian firms

Abstract

Purpose

This paper aims to examine if certain board characteristics have an impact on the corporate social responsibility (CSR) score of corporations.

Design/methodology/approach

The authors’ paper analyzes the link between the ratings of CSR of the largest publicly traded Canadian firms (i.e. those included in the S&P/TSX 60 index) and the traits of their boards.

Findings

The authors’ examination concludes that the CSR score is positively linked with the percentages of women and independent directors. The study did not find a link in the cases of board characteristics, namely, director’s remuneration, director’s tenure and director’s ownership.

Research limitations/implications

The study focuses on the 60 largest public Canadian firms, which are strongly scrutinized. An analysis that includes smaller firms as well may show different results.

Practical implications

To improve the ability of boards of directors to deal with CSR, the appointment of women and independent directors should be given greater emphasis. Data show that all boards in their sample are composed of at least 50 per cent of independent directors, with an average of 80 per cent. Thus, there is a more limited room to ameliorate CSR by adding independent directors. In contrast, women represented, on average, only 14.25 per cent of all directors. Companies wanting to improve their CSR should consider appointing more female participation in their boards.

Originality/value

The paper contributes to the extant literature on corporate governance by presenting evidence of a link between CSR and certain board characteristics.

Citation

Deschênes, S., Rojas, M., Boubacar, H., Prud'homme, B. and Ouedraogo, A. (2015), "The impact of board traits on the social performance of Canadian firms", Corporate Governance, Vol. 15 No. 3, pp. 293-305. https://doi.org/10.1108/CG-08-2014-0097