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This study draws on financial slack, agency, and critical mass theories to investigate risky firms’ ESG engagement, board gender diversity’s moderating role between firm risk and ESG engagement, market reaction to risky firms’ ESG engagement, and board gender diversity’s role in moderating market reaction to risky firms’ ESG engagement.

The study uses a sample of 44,129 firm-year observations between 2005 and 2019 across nine industries and 61 countries. We adopt Refinitiv’s (LSEG Workspace database) scheme in assessing firm ESG performance.

We find that firm risk is significantly and negatively associated with ESG performance. Board gender diversity (1) negatively moderates between firm risk and the environmental pillar (2) negatively moderates between firm risk and the social pillar, (3) negatively moderates between firm risk and CSR strategy metric of governance pillar but positively moderates between firm risk and management metric of the governance pillar. We show that as the number of female director increases, their moderating effect between firms’ risk and ESG performance becomes stronger. The existence of a critical mass of female directors on the board alleviates the market’s negative reaction to ESG engagements.

Although plenty of prior studies focused on board gender diversity’s role in driving firm outcomes, its role in risky firms’ ESG engagement is yet to be explored. It is imperative to investigate risky firms’ engagement in ESG because these firms face more financial distress and are more concerned about their short-term survival whilst investing in ESG is specifically sensitive to the accessibility of slack resources. Consequently, risky firms may have less flexibility to initiate ESG activities or cease them.

This study aims to investigate whether social reputation via corporate social responsibility (CSR) awarding facilitates access to debt and decreases the cost of debt and whether governance mechanisms moderate this relationship.

The sample covers the period between 2002 and 2021, during which CSR award data were available in the Thomson Reuters Eikon/Refinitiv database. The empirical models are based on country, industry and year fixed-effects regression.

While the main findings produced an insignificant result for access to debt, they indicated strong evidence for the positive relationship between CSR awarding and the cost of debt. Moreover, the moderating effect highlights that while the sustainability committee helps CSR-awarded companies access debt more easily, independent directors help firms decrease the cost of debt via CSR awarding. Furthermore, the results differ between the US and the non-US samples, earlier and recent periods, high- and low-leverage firms and large and small firms.

For the first time, to the best of the authors’ knowledge, the authors assess whether social reputation via CSR awarding facilitates access to debt and decreases the cost of debt in an international and cross-industry sample. Little is known about the effect of social reputation on loan contracting, although social reputation conveys broader information that goes beyond the firm’s internal (performance) and external (reporting) CSR practices. The authors also draw attention to the differing roles of distinct governance mechanisms in leveraging social reputation for loan contracting.

In addition to financial performance, firms are increasingly trying to obtain a social reputation from their corporate social responsibility (CSR) engagement within society due to reputational benefits. Thus, the authors seek to highlight two facilitators of social reputation which may help firms realize their targets. Hence, drawing on the signaling, stewardship and legitimacy theories, this study aims to investigate whether chief executive officer (CEO) power and firm visibility help translate CSR engagement into greater social reputation, proxied by CSR awarding.

Adopting a cross-country and cross-industry sample of 52,549 observations between 2002 and 2021, the authors run a fixed effects regression analysis.

The authors found that greater CSR engagement leads to better social reputation. Furthermore, CEO power and greater firm visibility foster a positive association between CSR engagement and social reputation. The results are robust to endogeneity concerns, which were addressed by propensity score matching, entropy balancing, instrumental variable regression analysis, alternative samples and regulatory changes.

Although the CEOs’ power is severely criticized in the corporate governance literature due to its weakening effect on board monitoring ability, the authors found that it is beneficial for firms seeking to improve their social reputation. This outcome may help firms shape their upper management structure for greater social reputation gains from CSR engagement. Furthermore, more visible firms achieve greater social reputation through their CSR engagement, which could help managers co-consider firms’ advertising–CSR awarding engagements and budget their financial resources accordingly.

Increasing the CSR engagement of firms has prompted investigations into how firms may better benefit from this investment. However, despite considerable research interest in the financial return of CSR engagement, the social reputation that firms derive from CSR engagement has not been sufficiently addressed. Thus, the authors examine whether two corporate mechanisms, CEO power and firm visibility, could help firms translate CSR engagement into improved social reputation, proxied by CSR awarding.

This study aims to examine the potential threshold effect in the association between corporate social responsibility (CSR) performance and social reputation.

This study includes an international and cross-sector sample covering 41 countries, nine sectors and 45,395 firm-year observations. It applies a parabolic relationship, rather than linear regressions, between CSR engagement and social reputation via CSR awarding. This implies that CSR performance should increase until a certain point to gain a social reputation but then should decrease after reaching that threshold point considering limited financial resources.

The findings of country-industry-year fixed-effects logistic regressions confirm the threshold effect with an inverted U-shaped relationship between CSR and CSR awarding. More specifically, firms increase their environmental and social engagement until a certain point, and then they reduce it after reaching a social reputation. This finding is confirmed by three dimensions of the environmental pillar (i.e. resource use, emissions and eco-innovation) as well as four dimensions of the social pillar (i.e. workforce, human rights, community and product responsibility). The findings are robust to alternative samples, alternative methodology and endogeneity concerns.

The findings of this study have implications for firms about the better allocation of available funds between CSR and operations. The findings could be particularly useful for CSR teams/committees of the firms who formulate CSR policies and how to mobilize firm resources for better social enhancement via environmental and social reputation.

This study examines deeper the nature of the association between CSR engagement and social reputation and considers the possibility of an inverted U-shaped relationship between them. The determination of a threshold effect suggests that CSR engagement increases social reputation, but once it reaches a certain point, social reputation will decrease owing to financial resource constraints.