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The Role of Board in Corporate Social Responsibility: A Normative Compliance Perspective

Osemeke, L, Osemeke, N and Okere, RO (2020) The Role of Board in Corporate Social Responsibility: A Normative Compliance Perspective. Corporate Ownership and Control, 17 (4). pp. 152-165. ISSN 1727-9232

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Purpose: This paper focuses on the board’s influence on Corporate Social Responsibility (CSR) among Public Liability Companies (PLCs). The paper uses normative compliance theory to develop the theoretical framework thereby advocating and complementing other theories CSR. Methodology: The paper adopts balanced random effect regression model to estimate the relationship between board characteristics (such as board composition, diversity and size on CSR, while controlling for firm size, sector and risk). This involved the use of balanced panel data of 174 PLCs from 2003 to 2009. The random effect estimator is used to test the specific effects of the board composition, board size and board diversity on CSR of PLCs in Nigeria. The data are obtained from Nigerian Stock Exchange (NSE) fact book from 2003 to 2009. Findings: The paper found that Non-executive directors (NEDs) and board size are positively significantly correlated with CSR, while the executive director was negative and significantly related with CSR. Originality: The testing of the theory in the context of Nigeria contributes to the body of knowledge on sub-Sahara Africa, particularly Nigeria which offers a developing country perspective. The paper explores the relationship between board characteristics and CSR thereby contributing to the governance processes of listed companies and how good governance should be encouraged by understanding the board dynamics. Study Contribution: The implication is that, for managers and corporations focusing on shareholder interest, must also acknowledge that the society wants companies to accommodate multiple stakeholders interest for them to compete and survive in the long run. Social Implication: The social implications for companies to understand that business and the society are interwoven. Also efforts should be made by the board and companies to be morally and socially responsible to the society. Limitations: The data employed for this paper is majorly limited to listed companies on the NSE and the study covers only firms and industrial sectors within a single country but do not cover country to country differences or factors. It nevertheless presents implications for understanding CSR challenges in developing markets and provides insights into how to structure the board of listed companies. Finally, we hope this paper encourages future studies on the board dynamics and social performance of companies.

Item Type: Article
Uncontrolled Keywords: 1501 Accounting, Auditing and Accountability, 1502 Banking, Finance and Investment, 1503 Business and Management
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: Business & Management (from Sep 19)
Publisher: Virtus Interpress
Date Deposited: 15 Jun 2020 13:25
Last Modified: 23 Aug 2022 14:30
DOI or ID number: 10.22495/cocv17i4art13
URI: https://researchonline.ljmu.ac.uk/id/eprint/13096
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