The influence of board social capital on corporate social responsibility reporting
| DOI | https://doi.org/10.1108/JIC-11-2020-0359 |
| Published date | 29 April 2021 |
| Date | 29 April 2021 |
| Pages | 913-935 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Nuria Reguera-Alvarado,Francisco Bravo-Urquiza |
The influence of board social
capital on corporate social
responsibility reporting
Nuria Reguera-Alvarado and Francisco Bravo-Urquiza
Department of Accounting and Financial Economics, University of Seville,
Seville, Spain
Abstract
Purpose –The main objective of this paper is to analyze the influence of multiple directorships, as a critical
component of board social capital, on CSR reporting. This study also explores the moderating effect of certain
board attributes on multiple directorships.
Design/methodology/approach –The authors’sample is composed of Spanish listed firms in the Madrid
Stock Exchange for the period 2011–2017. A dynamic panel data model based on the Generalized Method of
Moments (GMMs) is employed.
Findings –Relying on a resource dependence view, the authors’results highlight an ambiguously positive
association between multiple directorships and the level of CSR reporting. In particular, this relationship is
positively moderated by both board size and gender diversity.
Research limitations/implications –These findings contribute to academic debates concerning the value
of board members intellectual capital. In particular, the authors emphasize the importance of board social
capital, as well as the need to consider the context in which directors make decisions.
Practical implications –This evidence may prove helpful to firms when configuring the board of directors,
and for regulators and professionals when refining their legislations and recommendations.
Originality/value –To the best of the authors’knowledge, this is the first study that empirically analyzes the
impact of an important element of board social capital, such as multiple directorships, on CSR reporting, which
has become crucial in financial markets.
Keywords Board intellectual capital, Board social capital, Multiple directorships, CSR reporting, Board size,
Gender diversity
Paper type Research paper
1. Introduction
The current economic environment is characterized by a growing interest in intellectual
capital, corporate social responsibility (hereinafter CSR), and corporate governance (Tejedo-
Romero and Araujo, 2020). These topics have become pivotal for regulators, professionals,
and firms alike, and previous literature has highlighted the existence of interrelated linkages
among the three concepts (Altuner et al., 2015).
On the one hand, intellectual capital has been playing an ever-increasing role for firms in
terms of creating organizational competitiveness and sustainability (Alvino et al., 2020).
Indeed, previous studies underline that the bulk of a company’s value is related to intangible
resources, such that the ability to manage intellectual capital therefore remains crucial for
firms (Berezinets et al., 2016). Accordingly, research on intellectual capital has grown
significantly over the last few years, although empirical evidence in this field is still far from
definitive (Massaro et al., 2018). In particular, current research calls for a broader approach in
order to gain a deeper understanding of how intellectual capital works. In this regard, recent
studies have emphasized the role of corporate boards of directors in the creation and
leveraging of a firm’s intellectual capital (P
erez-Calero et al., 2016;Scarfato et al., 2020).
Board social
capital and
CSR reporting
913
This paper was prepared with the financial support of the Spanish Association of University Professors
of Accounting (ASEPUC). All the remaining errors are the authors’only responsibility.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 24 November 2020
Revised 3 February 2021
Accepted 23 March 2021
Journal of Intellectual Capital
Vol. 23 No. 4, 2022
pp. 913-935
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-11-2020-0359
Directors are likely to bring crucial intangible resources to a board (i.e., knowledge, skills,
experience and connections), and can use their intellectual capital to improve firms’
competitive advantage (Berezinets et al., 2016).
On the other hand, while intellectual capital and CSR are theoretically interconnected
concepts, the literature concerning the linkages between the two issues is scant (Gallardo-
V
azquez et al., 2019;Nikolaou, 2019). One emerging line of research suggests that CSR
enhances a firm’s level of intellectual capital, which results in it increasing its competitive
advantage and value (Jain et al., 2017;Gangi et al., 2019;Khan et al., 2019;Nirino et al., 2020).
These studies consider that CSR strategies improve the firm’s relations with its stakeholders,
which positively affects the efficiency of intellectual capital. In addition, research has also
examined how boards of directors, as a key source and driver of intellectual capital, may
boost CSR (Barka and Dardour, 2015;Al-Dah, 2019;Ramon-Llorens et al., 2019). These studies
stress that directors become providers of human and social capital, which proves decisive
with regard to developing sustainable strategies and successfully implementing CSR policies
to strengthen relations with stakeholders and gain competitive advantage.
Our paper extends this stream of research by exploring the relation between multiple
board directorships, as a relevant component of board social capital, and CSR reporting.
Specifically, the objective of this study is twofold. First, we examine the effect of the number
of external board directorships on the level of CSR reporting. Second, we analyze how certain
board characteristics moderate the influence of multiple board directorships on CSR
reporting. The topic is timely and relevant for a number of reasons.
First, multiple directorships [1], which take place when a board member of a firm sits on
the board of directors of another firm, are critical vis-
a-vis developing board social capital
and, therefore, enhance the intellectual capital of boards of directors (Nicholson et al., 2004;
Berezinets et al., 2016). Multiple directorships remain an important board characteristic for
academics, policy-makers, and professionals alike. In particular, interlocking directorates
have been the subject of intense debate for regulators (European Commission, 2011) and
practitioners (Institutional Shareholder Services, 2020), who suggest that an excessive
number of directorships might enhance the busyness of boards and prove detrimental to
corporate decision quality. Furthermore, the issue concerning boards’busyness has recently
been addressed by national codes of corporate governance in a number of countries (i.e.
Australia, Canada, France, Germany, Italy, Japan, Spain, the United Kingdom and the United
States, among others). However, academics have increasingly underlined the role of multiple
directorships as providers of key resources for creating intangible value by developing CSR
activities, although the evidence is scarce and inconclusive, and the consideration of CSR
reporting is missing (Ortiz-de-Mandojana and Aragon-Correa, 2015;Glass et al., 2016;Al-
Dah, 2019.
Second, over the last few years, firms have been coming under ever-increasing pressure to
report information on CSR practices, which have become a crucial strategy for competitive
advantage (Gangi and Trotta, 2013;Arayssi et al., 2016). CSR information may even affect
firm valuation (Ioannou and Serafeim, 2015), investments decisions (Ioannou and Serafeim,
2019), corporate reputation (Odriozola and Baraibar-D
ıez, 2017) and the cost of finance (Cheng
et al., 2014). Consequently, CSR reporting has also been included in the agenda of regulators
how board social capital impacts CSR reporting is a central question when it comes to
ascertaining how board members provide valuable intellectual capital.
Third, the influence of board social capital is likely to be contingent and to depend on the
context (Wincent et al., 2010;Johnson et al., 2013). Despite being theoretically evident, there is
minimal empirical evidence concerning whether, and how, certain board attributes might
interact with one another in their links to CSR (Endrikat et al., 2020). In particular, to
comprehend the effects of board social capital, boards need to be considered as a group rather
JIC
23,4
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