Skip to content

12 July, 2025

  • Saved Articles
  • My Account
  • Subscribe
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • EU sustainability

      Omnibus package must not undermine EU sustainability

      Now is the time for Europe to speed up green transition, rather than slow it...

    • high pay

      Pay gap transparency needs to be better

      It’s not unknown for a CEO to earn 500 times as much the median employee,...

    • executive pay

      Executive pay trends in 2025

      Opposition to remuneration reports has grown sharply, according to Georgeson’s analysis of voting outcomes in...

  • Comment
      • View all
    • EU sustainability

      Omnibus package must not undermine EU sustainability

      Now is the time for Europe to speed up green transition, rather than slow it...

    • high pay Pay gap transparency needs to be better

      It’s not unknown for a CEO to earn 500 times as much the median employee,...

    • future-proof governance levers How to future-proof your business

      For boards to bolster resilience and create value in a polycrisis, a combination of hard...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • UK Corporate Governance Code Board meetings ‘are not up to scratch’

      Nearly three-quarters of board members believe the board’s performance in meetings needs improvement, an expert...

    • financial sanctions Tariffs chaos drives boardroom focus on resilience

      Business leaders will prioritise the resilience of their organisations in the face of economic upheaval...

    • supply chain oversight Act now on supply chain oversight, boards warned

      Board directors need to critically engage with the business’s supply chain activity, a panel of...

  • Board Careers
  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Board Advisory & Corporate Services
    • C-suite barometer: outlook 2025 – UK insights

      Forvis Mazars draws UK insights from its global study and looks at UK executives’ strategic...

    • Talent Management 2025 Mind Gym

      Talent Management in 2025

      From rethinking leadership to wrestling with AI, MindGym's report reveals the trends shaping talent strategies...

    • Korn Ferry CHRO 2025 (Copy)

      On The Highwire: Being a CHRO in 2025

      Korn Ferry surveyed 750 senior HR leaders (including 450 CHROs) to understand their key priorities...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Careers
    • Board Expertise
    • finance
    • Technology

Good governance boosts companies’ CSR performance

by Gavin Hinks on July 5, 2021

Study concludes that “corporate board reforms… appear to have a positive spillover for non-financial stakeholders”.

Board members looking at corporate reports

Image: Freedomz/Shutterstock.com

There is much talk about companies improving their treatment of the environment and people—what is often called corporate social responsibility (CSR). And there has been much debate about how this can been achieved. But new research suggests that good old-fashioned quality corporate governance can help work wonders.

Based on a dataset of more than 20,000 observations of 3,514 companies in 34 countries, a team of academics based in Canada and Hong Kong suggests that governance reforms that address classic governance issues such as audit committees and auditor independence, as well as separating the roles of chairs and chief executives, can boost the CSR performance of a company.

The researchers conclude that “corporate board reforms implemented primarily to ensure finances returns to shareholders (e.g. by improving board oversight/monitoring) also appear to have a positive spillover for non-financial stakeholders”.

The conclusions will come as good news to campaigners pushing companies to improve their relationship with stakeholders beyond just shareholders. It might also reassure investors keen to pressure companies to do their part to meet global climate crisis targets.

Links between CSR and governance

The research has origins in concerns surrounding CSR developments. The investigators behind this new research point out that there have been worries that improving CSR might come at a cost to executives who would therefore be less inclined to invest. Past research has also produced “equivocal” links between governance and CSR, they say.

But their statistical analysis finds firm results. Most notably reforms boost CSR more in countries with”more stringent legal environments” and with a more “pronounced” effect on companies with “high levels” of institutional share ownership.

And that may be because of an assumption that pursuing CSR issues at a company boosts shareholder value. The researchers spotted this question, acknowledging that a link between good standards of governance and CSR performance doesn’t necessarily indicate shareholders get better value.

So the team looked at the stats and conclude companies in countries with strong governance reforms “tend to exhibit a stronger relationship between CSR investment and future finance performance”.

They add: “This finding is consistent with the view that increased CSR investment after reforms is likely perceived by shareholders as value-enhancing.”

Increased reporting

There is much activity under way to persuade companies to take CSR more seriously. On the environment alone many companies now face implementation of TCFD reporting, the prospect of the International Financial Reporting Standards Foundation creating its sustainability reporting model, net zero emissions targets from central governments and, after the experience of Shell, an increased chance of climate litigation.

Elsewhere there is ample evidence that the pandemic has placed a focus on the way companies treat their people. The OECD recently insisted part of the response to Covid-19 must be improved governance, especially in relation to environmental, social and governance risks.

But this new research offers hope. At the very least it says good governance will help with CSR. That’s good news for proponents of quality governance everywhere.

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • Firms with a strong CSR record are more likely to survive a crisis
    October 12, 2021
    ESG investment

    Academics identify link between CSR and survival, showing that companies where CSR is a priority were less likely to delist in the pandemic.

  • Corporate disclosures affect strategic ability of boards
    August 29, 2023
    Audit ESG reporting

    Meeting reporting responsibilities means boards are left with less time for strategic discussions, reveals annual survey.

  • News round-up: this week in governance
    August 5, 2022
    carillion fine

    Audit firms' complaints about fines; Carillion directors' fines revealed; is it time to abolish the UK governance code?

  • G20 backs OECD corporate governance principles
    September 14, 2023
    G20 oecd

    The world’s leaders get behind the OECD’s revised guidance, which includes sustainability disclosure responsibilities.

Search


Follow Us

Register Free

Stay in the know! Register to access the latest governance news; plus receive updates about our events and podcasts – Sign up here

 

Most Popular

Featured Resources

wef global risks 2025

The Global Risks Report 2025

The 20th edition of the Global Risks Report reveals an increasingly fractured global...
Supply chain management cover

Strategic Oversight in Supply Chain Management: A Guide for Corporate Boards 2025

Supply chains have become complex, interdependent and opaque and—according to research...
OB-Cyber-Security

Cyber Security: What Boards Need to Know

Maintaining firewalls, protecting servers and filtering malicious emails rarely make...

The IA’S Principles Of Remuneration 2024 2025

This guidance from the Investment Association is aimed at assisting remuneration...
Diligent 2024 leadership tech cover

Leadership, decision-making & the role of technology: Business survey 2024

This research report by Board Agenda and Diligent sheds light on how board directors...

Director Reference Guide: Navigating Conflict in the Boardroom

The 'Director Reference Guide' on navigating conflict in the boardroom provides practical...
Nasdaq 2024 governance report cover

Nasdaq 2024 Global Governance Pulse

This Nasdaq survey gathered data from more than 870 board members, executives, and...

Becoming a non-executive director (4th edition)

Board composition is the subject of much debate, while the role of the non-executive...
art & science brainloop new cover

The Art & Science of Creating an Effective Board

Boards are coming under more scrutiny and pressure than ever before from regulators,...
SAA First time NED guide

First Time Guide for Non-Executive Directors

The role of the non-executive director has never been more vital: to advise, support,...

Register Free

Stay in the know! Register to access the latest governance news; plus receive updates about our events and podcasts. Register


  • Editors & Contributors
  • Editorial Advisory Board
  • Board Advisory & Corporate Services
  • Media Marketing Solutions
  • Contact Us
  • About Us
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
|

Copyright © 2025 Questor Media Group Ltd.

  • Terms & Conditions
  • Privacy Policy
  • Sitemap