Corporate social irresponsibility and boards: The implications of legal expertise

Ravi Dharwadkar, Jun Guo, Linna Shi, Rong Yang

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

In this study, we examine whether Corporate Social Irresponsibility (CSIR) affects the appointment of directors with legal expertise on the board and whether the presence of legal directors has implications for the CSIR-stock return relationship. Using a large sample of publicly traded U.S. firms, we find that firms involved more in CSIR have more directors with legal expertise on the board in subsequent years. Our additional tests suggest that this relationship is not driven by omitted variables or reverse causality. We further find that board legal expertise helps to mitigate the negative stock performance arising from CSIR. Overall, our findings suggest that boards with legal expertise are better able to respond to CSIR and mitigate its damage.

Original languageEnglish (US)
Pages (from-to)143-154
Number of pages12
JournalJournal of Business Research
Volume125
DOIs
StatePublished - Mar 2021

Keywords

  • Board of director
  • Corporate Social Irresponsibility (CSIR)
  • Legal expertise

ASJC Scopus subject areas

  • Marketing

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