- We examine whether and how board connections affect the firm's corporate social responsibilities (CSR).
- We find that board connectedness is positively associated with CSR performance.
- Our findings suggest firms that operate in a complex business environment or require more advising benefit more from a well-networked board.
- Firms that are poorly governed, have high stock return volatility, low market capitalization, or low institutional ownership tend to benefit more from the well-connected board when the cost of acquiring information is higher.
- In addition, we show that independent directors’ abilities to gather information and resources from their networks can facilitate the transmission of information.
- Overall, our study documents the informational advantage of a network as the predominant channel that allows a well-connected board to improve a firm’s CSR performance.
Amin, A., Chourou, L., Kamal, S., Malik, M., & Zhao, Y. (2020). It’s who you know that counts: Board connectedness and CSR performance. Journal of Corporate Finance, 64, 101662. doi: 10.1016/j.jcorpfin.2020.101662
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Available online 15 June 2020, 101662.
JEL Classification: G30, G39
Version posted is the authors' preprint.