Can a corporate social responsibility committee be utilized to enhance the effectiveness of independent directors?

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Abstract

The aim of this study is to investigate the role of board independence on environmental, social and governance (ESG) performance and the moderating role of a corporate social responsibility (CSR) committee on the relationship between these variables. The sample includes 2,925 companies from 18 industries and 38 countries for the period of 2002–2020. To test our hypotheses, we developed a regression model based on the panel data dependence technique. The results confirm that the establishment of a CSR committee within the board moderates the relationship between board independence and ESG performance. A CSR committee acts as a booster into enhancing the effectiveness of the board as a corporate governance mechanism. This article contributes to the academic literature evidencing the importance of establishing a sub-committee within the board of directors delegated to CSR issues. It provides also interesting insights for companies and policy makers for formulating future guidelines on corporate governance.

Keywords: ESG Performance, Board Independence, CSR Committee, Refinitiv Eikon Datastream

Authors’ individual contribution: Conceptualization — S.P. and G.D.; Methodology — L.Lep.; Validation — L.Lep.; Formal Analysis — L.Lep.; Investigation — S.P. and G.D.; Resources — L.Lep.; Data Curation — L.Lep.; Writing — Original Draft — S.P., G.D., and L.Lan.; Writing — S.P., G.D., and L.Lan.; Review & Editing — S.P., G.D., and L.Lan.; Supervision — L.Lep.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M140, M400, M480

Received: 12.09.2022
Accepted: 26.12.2022
Published online: 27.12.2022

How to cite this paper: Pisano, S., D’Amore, G., Landriani, L., & Lepore, L. (2022). Can a corporate social responsibility committee be utilized to enhance the effectiveness of independent directors? Corporate Ownership & Control, 20(1), 201–213. https://doi.org/10.22495/cocv20i1art18