Our latest pick of interesting articles on CSR.
Corporate sustainability: A view from the top
Through a qualitative approach (via semi-structured interviewing), Rego et al. explore the perspective of 72 CEOs of companies operating in Portugal about the definition of corporate sustainability (CS) and its facilitators, and obtain four main findings.
First, most CEOs equate CS with the company’s continuity/viability.
Second, the relevance ascribed to different stakeholders differs considerably: while more than 50 % of CEOs cited shareholders/profits, and more than 40 % mentioned the natural environment and employees, very few mentioned customers, society, suppliers, the State, or competitors.
Third, the management practices considered as most important to develop CS are (a) the organisation’s strategic alignment with a long-term orientation, and (b) developing and energising people within a positive organizational climate characterised by trust and ethics.
Fourth, the leadership characteristics and behaviours considered as most important to foster CS are scrutinising the future and leading people through a mobilising vision; energising and developing employees; and leading by example.
While the whole picture is largely consistent with the “sustainable strategic management” (SSM) approach suggested by Stead and Stead (2014) and with recent CS integrative approaches, the great majority of CEOs who participated in the study have not embraced such integrative and coevolutive perspectives.
Rego, A., Cunha, M.P. & Polónia, D. 2017. Corporate Sustainability: A View From the Top.
Journal of Business Ethics, 143(1), 133–157.
No universal feature of CSR-supportive board characteristics in Korea
Previous studies in Western contexts have examined the relationships between various board characteristics and CSR, yet the relationships need to be re-examined in non-Western contexts given differential theoretical premises across contexts.
Chang et al. specifically propose that the effects of board characteristics on CSR in Korea should be patterned distinctively from Western-based existing literature, focusing on three important board characteristics, such as a board’s independence, social ties, and diversity. Using a panel dataset from large Korean firms, the researchers found that various relationships between board characteristics and CSR were non-linear, whereas most of the previous research on Western contexts found that the same relationships were linear.
Specifically, curvilinear relationships were found between CSR and board independence (i.e., exponentially growing shape), CEO-outside director social ties (i.e., inverted U-shape), and educational diversity (i.e., U-shape). These findings suggest that there is no universal feature of CSR-supportive board characteristics due to the unique characteristics of various institutional contexts.
Chang, Y.K., Oh, WY., Park, J.H. et al. 2017. Exploring the Relationship Between Board Characteristics and CSR: Empirical Evidence from Korea.
Journal of Business Ethics, 140(2), 225–242.
The role of board environmental committees in corporate environmental performance
This study explores the relationship between board environmental committees and corporate environmental performance (CEP). Dixon-Fowler et al. propose that board environmental committees will be positively associated with CEP. Moreover, these authors argue that the composition of the committee (i.e. stakeholder representation) as well as the presence of a sustainability manager will influence this relationship.
Results find support for a positive association between board environmental committees and CEP. Further, the presence of a senior-level environmental manager positively moderates this relationship, but is not effective in isolation. Unexpectedly, no support was found for the influences of stakeholder representation.
Dixon-Fowler, H.R., Ellstrand, A.E. & Johnson, J.L. 2017. The role of board environmental committees in corporate environmental performance.
Journal of Business Ethics, 140(3), 423–438.
How does sustainability leadership affect firm performance?
Recent years have seen a significant increase in stakeholder pressure on firms to be not only economically sustainable but also from an environmental and social perspective. Besides operational changes in practices and products companies have reacted toward this increased pressure from a strategic perspective through structural changes of their top management team (TMT).
A recent addition to the TMT has been the appointment of the chief officer of corporate social responsibility (CSR). In this paper, the authors take a behavioural perspective and investigate how the employment of a chief officer of CSR to the TMT impact on firm performance. Specifically, the researchers explore how certain characteristics of the newly appointed chief executive of CSR impact on a firm’s financial performance.
Wiengarten et al. collected secondary, longitudinal data of listed companies in the United States. Results indicate that appointing a chief executive of CSR does under certain conditions and characteristics result in financial performance benefits. Furthermore, the greatest financial performance benefits can be achieved if the appointee is female and has a CSR functional background.
Wiengarten, F., Lo, C.K.Y. & Lam, J.Y.K. 2017. How does sustainability leadership affect firm performance? The choices associated with appointing a Chief Officer of Corporate Social Responsibility.
Journal of Business Ethics, 140(3), 477–493.
In pursuit of a ‘Single Source of Truth’: From threatened legitimacy to integrated reporting
This paper explores one organisation’s journey into non-financial reporting, initially motivated by a crisis in public confidence that threatened the organisation’s legitimacy to the present with the organisation embracing integrated reporting.
The organisation’s journey is framed through a legitimation lens and is illustrated by aligning internal reflections with external outputs guided by predominant paradigms of good practice, such as the GRI guidelines and more recently integrated reporting (IR). Beck et al. find that the organisation’s relationship with external guidelines has evolved from pragmatic adoption as a means of seeking external legitimation to the present position where those that prepare external reports are informed by the organisation’s strategic positioning and not constrained by the promulgation of voluntary guidelines.
From the case study, the authors suggest that the International Integrated Reporting Council (IIRC) may face two hurdles: First, organisations may define social norms based on a broader definition of stakeholders than the definition currently published by the IIRC. The second hurdle is to convince report preparers that adopting integrated reporting (IR) will positively impact on capital flows.
Beck, C., Dumay, J. & Frost, G. 2017. In pursuit of a ‘Single Source of Truth’: From threatened legitimacy to integrated reporting.
Journal of Business Ethics, 141(1), 191–205.
Directors OCB: Director role-identity and boardroom structure
While directors’ task boundaries are usually ambiguous, some of their activities or behaviors clearly constitute their formal duties, whereas others are usually perceived as organizational citizenship behaviour (OCB). Applying identity theory, the authors present a theoretical model that demonstrates one of the key drivers for directors to engage in OCB with a focus on their role identity. Yoshikawa and Hu argue that an individual director’s role identity is one of the key factors that motivate directors to engage in OCB. Furthermore, the authors propose that two board-level contingencies, board capital, and informal board hierarchy order, can moderate the effect of directors’ role-identity salience on their OCB. That is, low levels of board capital and directors’ higher positions in a board’s informal hierarchy enhance directors’ motivation to engage in OCB.
Yoshikawa, T. & Hu, H.W. 2017. Organizational Citizenship Behaviors of Directors: An Integrated Framework of Director Role-Identity and Boardroom Structure.
Journal of Business Ethics, 143(1), 99–109.