Co-Opted Directors and Corporate Social Responsibility

This study examines the relationship between board co-option and corporate social responsibility (CSR) among U.S. firms. The results indicate that higher levels of board co-option are linked to weaker CSR performance, particularly in terms of environmental initiatives and diversity-related social programs. The negative association between board co-option and CSR is more pronounced in firms in which CEOs hold substantial power and short-term managerial compensation is prioritized and in industries characterized by higher information asymmetries. In contrast, independent, non-co-opted directors appointed before the incumbent CEO enhance engagement in CSR, highlighting their important role in fostering socially responsible corporate behavior.

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Publication Details

Journal
Journal of Accounting Auditing & Finance
Published
2025-08-20
DOI
https://doi.org/10.1177/0148558x251368673
Citations
2
Primary Topic
Corporate Finance and Governance
Type
article
Field-Weighted Citation Impact
7.82

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article

Co-Opted Directors and Corporate Social Responsibility

Sami Vähämaa, Hanna Silvola, Aaron Afzali
2 citations
Journal of Accounting Auditing & Finance
Corporate Finance and Governance
7.82
article

Co-Opted Directors and Corporate Social Responsibility

Sami Vähämaa, Hanna Silvola, Aaron Afzali
article en
2 citations

Abstract

This study examines the relationship between board co-option and corporate social responsibility (CSR) among U.S. firms. The results indicate that higher levels of board co-option are linked to weaker CSR performance, particularly in terms of environmental initiatives and diversity-related social programs. The negative association between board co-option and CSR is more pronounced in firms in which CEOs hold substantial power and short-term managerial compensation is prioritized and in industries characterized by higher information asymmetries. In contrast, independent, non-co-opted directors appointed before the incumbent CEO enhance engagement in CSR, highlighting their important role in fostering socially responsible corporate behavior.

Journal of Accounting Auditing & Finance
Hanken School of Economics (FI), University of Vaasa (FI)
Liikesivistysrahasto
Openalex Percentile: Top 3%
Corporate Finance and Governance
7.82
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