This study examined the relationship between the proportion of women serving on firms' boards of directors and the extent to which these same firms engaged in charitable giving activities. Using a sample of 185 Fortune 500 firms for the 1991-1994 time period, the results provide strong support for the notion that firms having a higher proportion of women serving on their boards do engage in charitable giving to a greater extent than firms having a lower proportion of women serving on (...) their boards. Further, the results suggest a link between the percentage of women on boards and firm philanthropy in the areas of community service and the arts, but found no link between women boardmembers and firm giving to support education or public policy issues. The implications of the findings and some areas for future research are discussed. (shrink)

Using agency theory, this study empirically examined the relationship between board composition and corporate philanthropy. Generally, the ratio of insiders to outsiders, the percentage of insider stock ownership, and the proportion of female and minority board members were found to be positively and significantly associated with firms'' charitable contributions.

This study contributes to the work on board composition and firm corporate social responsibility by extending it to the environmental domain. It evaluates the relationship between boards of directors’ composition and environmental corporate social responsibility by integrating literatures on board composition, firm corporate social responsibility, and individual differences in attitudes toward and information about environmental issues. Using disclosed company data and the natural environment ratings data from Kinder Lydenberg Domini Inc. for 78 Fortune 1000 companies, the study finds that a (...) higher proportion of outside board directors is associated with more favorable ECSR and higher KLD strengths scores. Firms with boards composed of three or more female directors received higher KLD strengths scores. And, boards whose directors average closer to 56 years in age and those with a higher proportion of Western European directors are more likely to implement environmental governance structures or processes. Our results also reinforce growing concerns around unidimensional KLD measures. (shrink)

Abstract:This paper contends that rationality is more properly evaluated as a property of an organization’s relationships with its stakeholders than of the organization itself. We predicate our approach on the observation that stakeholders can hold goals quite distinct from those of owners and top managers, and these too can be rationally pursued. We build upon stakeholder theory and Weber’s classic distinction betweenwertrationalitatandzweckrationalitat, adding to them the “new institutionalist” concept of the organization field (1983, 1991). Stakeholders employ a variety of direct (...) and indirect mechanisms to rationalize relations with the firm. We discuss four: internal subunits, legislated stakeholder participation, legislated access to information, and direct stakeholder activism. These developments are blurring the distinction between the environment and the organization by importing the values and goals of external stakeholders into the internal organization. They are also precipitating a more structured set of relationships among the actors who comprise the field. To the extent that thezweckrationalitatvalues of managers and owners as well as thewertrationalitatconcerns of stakeholders are met, the firm is more rational. (shrink)

Critics attack normative ethical stakeholder theory for failing to recognize the special moral status of shareholders that justifiesthe fiduciary duties owed to them at law by managers. Stakeholder theorists reply that there is nothing morally significant about shareholders that can underwrite those fiduciary duties. I advance an argument that seeks to demonstrate both the special moral status of shareholders in a firm and the concomitant moral inadequacy of stakeholder theory. I argue that (i) if some relations morally requirefiduciary duties, and (...) (ii) the shareholder-manager relation possesses the features that make fiduciary duties morally necessary to thoserelations, then (iii) stakeholder theory is morally lacking. (shrink)

In this article, we examine the link between board composition and an enterprise strategy outcome, stakeholder relations. Because a firm’s enterprise strategy is set at the highest level of the organization, we expect the presence of stakeholder directors (suppliers, customers, employees, and community representatives) to be positively associated with stakeholder performance.Results from an analysis of 3,268 board members representing 250 firms are discussed in the context of both corporate governance and stakeholder management literatures.

Abstract:This paper contends that rationality is more properly evaluated as a property of an organization’s relationships with its stakeholders than of the organization itself. We predicate our approach on the observation that stakeholders can hold goals quite distinct from those of owners and top managers, and these too can be rationally pursued. We build upon stakeholder theory and Weber’s classic distinction betweenwertrationalitatandzweckrationalitat, adding to them the “new institutionalist” concept of the organization field (1983, 1991). Stakeholders employ a variety of direct (...) and indirect mechanisms to rationalize relations with the firm. We discuss four: internal subunits, legislated stakeholder participation, legislated access to information, and direct stakeholder activism. These developments are blurring the distinction between the environment and the organization by importing the values and goals of external stakeholders into the internal organization. They are also precipitating a more structured set of relationships among the actors who comprise the field. To the extent that thezweckrationalitatvalues of managers and owners as well as thewertrationalitatconcerns of stakeholders are met, the firm is more rational. (shrink)

One of the fundamental principles of good corporate governance is transparency, i.e., the disclosure of private information to external stakeholders, so that they may make judgments and decisions relating to the corporation. Equally important, but less discussed, is the competing value that corporations need to protect legitimate secrets. Corporations thus need a communication strategy for dealing with external stakeholders which addresses the conflict between disclosure and secrecy. This article focuses on an important element of that communication strategy in the context (...) of financial reporting: the possibility that corporate insiders may consider it in their interest, or in the interest of specific stakeholders, to alter or manipulate the financial information that it discloses publicly. Using concepts from the corporate governance and financial reporting literatures, it addresses the ethical question of who (management or the board of directors) should be responsible for making the fundamental strategic choices whether and (if so) how the corporation alters or manipulates the financial information. This article argues that the board of directors is responsible for formulating (and monitoring) the corporation's communication strategy, and that management is responsible for carrying it out. (shrink)

In this empirical study, we present two new models that are corporate ethics based. The first model numerically quantifies the corporate value index (CV-Index) based on a set of predefined parameters and the second model estimates the market-to-book values of equity in relation to the CV-Index as well as other parameters. These models were applied to Canadian companies listed on the Toronto Stock Exchange (TSX). Through our analysis, we found statistically significant evidence that corporate values (CV-Index) positively correlated with firm (...) performance. The results are even more significant for firms with low market-to-book values. Our empirical findings suggest that corporate ethics is vital for management, employees, shareholders, stakeholders, and the community at large. In addition, we have tested and confirmed five hypotheses that are used to illustrate corporate ethics behavior and performance. (shrink)

This research reports the results of a study of women serving on boards of directors of Canadian private and public sector organizations. These women (N = 278) were an impressive and talented group (eduction, professional designations). In addition, they brought a variety of backgrounds and expertise to their director responsibilities. Most were nominated as a result of recommendations from current board members, CEOs, or someone who knew board members or CEOs. Thus personal relationships (the old boy's network) as well as (...) track records and appropriate expertise were important factors in board nominations. Women directors thought they had some influence on women's issues with their boards and board companies. A majority believed that board members should be more diverse, including more women and fewer male CEOs. However they indicated several barriers faced by women in being selected and nominated for board appointments. (shrink)

This article explores how the diversity of board resources and the number of women on boards affect firms' corporate social responsibility (CSR) ratings, and how, in turn, CSR influences corporate reputation. In addition, this article examines whether CSR ratings mediate the relationships among board resource diversity, gender composition, and corporate reputation. The OLS regression results using lagged data for independent and control variables were statistically significant for the gender composition hypotheses, but not for the resource diversitybased hypotheses. CSR ratings had (...) a positive impact on reputation and mediated the relationship between the number of women on the board and corporate reputation. (shrink)

This paper examines stakeholder responses to impression management tactics used by firms that express environmental commitment. We inductively analyzed data from 98 open-ended questionnaires and identified two impression management tactics that led respondents to believe that a firm was credible in its commitment to the natural environment. Approximately, half of the respondents responded to illustrative impression management tactics that provide images of, and/or broad-brush comments about, the firm’s commitment to the natural environment. The other half responded to demonstrative impression management (...) tactics, which provide specific facts and details about the firm’s operations. The research results provide important insights into the effects of organizational transparency. In this paper, we explore these findings and provide directions for future research. (shrink)

This paper examines stakeholder responses to impression management tactics used by firms that express environmental commitment. We inductively analyzed data from 98 open-ended questionnaires and identified two impression management tactics that led respondents to believe that a firm was credible in its commitment to the natural environment. Approximately, half of the respondents responded to illustrative impression management tactics that provide images of, and/or broad-brush comments about, the firm's commitment to the natural environment. The other half responded to demonstrative impression management (...) tactics, which provide specific facts and details about the firm's operations. The research results provide important insights into the effects of organizational transparency. In this paper, we explore these findings and provide directions for future research. (shrink)