Do Board Characteristics Promote Corporate Social Responsibility? An Empirical Analysis for European Companies

In recent years, businesses have faced increasing pressure from consumers, investors, and regulators to prioritize sustainability, ethics, and transparency. Consequently, Corporate Social Responsibility (CSR) is growing and companies are integrating CSR into their core strategies to enhance long-term value and align with societal expectations. Board characteristics significantly influence CSR outcomes. With boards that actively support and oversee CSR initiatives, sustainable practices would be supported. Hence, studying the relationship between board composition and CSR is very useful. The purpose of this paper is to check whether board characteristics affect CSR for European firms. To achieve this goal, we used a large sample of 1376 listed companies located in 23 European countries from 2014 to 2023. The System Generalized Method of Moment (SGMM) was performed as an econometric approach. Overall, the empirical results show that board-related variables, such as board size, duality, independent investors, gender diversity, culture diversity, and board-specific skills significantly influence ESG performance. In contrast, variables that reflect firm specifics such as firm size and profitability do not have a significant impact on CSR performance.