Connecting the Dots: Do Financial Analysts Help Corporate Boards Improve Corporate Social Responsibility?

Abstract

[EN] This paper presents an examination of the joint impact of board structural elements atfirm level and financial analysts as market-level corporate governance (CG) on corpo-rate social responsibility (CSR) performance. Our study contributes to the CG–CSRliterature by adopting the bundling approach, a perspective that has recently attractedresearchers’ attention as an answer to any heterogeneity and fragmentation in existingfindings. It is based on an extensive sample consisting of 7,739 firm-year observationsof US firms for the 2006–2015 period. The findings suggest that financial analysts com-plement the corporate board with more independence, gender diversity and a specializedCSR committee to realize a certain level of CSR performance of a firm. The findings alsoindicate that analysts substitute for those internal governance factors that are associatedwith weaker boards – larger sizes and dual-role CEOs. We also draw implications forresearch and practice from our findings