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Corporate social responsibility and shareholder support for corporate governance changes

Charles P. Cullinan (Accounting Department, Bryant University, Smithfield, Rhode Island, USA)
Lois S. Mahoney (Department of Accounting and Finance, Eastern Michigan University, Ypsilanti, Michigan, USA)
Pamela Roush (Kenneth G. Dixon School of Accounting, University of Central Florida, Orlando, Florida, USA)

Social Responsibility Journal

ISSN: 1747-1117

Article publication date: 3 October 2016

2881

Abstract

Purpose

This paper examines whether shareholders consider corporate social responsibility (CSR) performance when voting on corporate governance change proposals submitted by dissident shareholders. These proposals recommend changes to the corporate governance status quo and are made by dissident shareholders who are dissatisfied with the company’s existing governance practices.

Design/methodology/approach

Using 195 governance change proposals voted on during 2013, the paper examines the relationship between CSR performance (obtained from the MSCI database) and the level of voting support for these proposals.

Findings

This study finds that shareholder support for corporate governance change proposals submitted by dissident shareholders is positively related to firms’ CSR concerns, especially environmental concerns.

Research limitations/implications

The findings suggest that shareholders may be concerned with the potentially adverse effects of weak CSR performance, especially poor environmental performance, and may support changes to corporate governance structures when a company’s CSR and environmental performance is weaker.

Originality/value

As the first research to examine the relationship between CSR and proposed changes to corporate governance, this study provides unique insights into shareholder perceptions of the value of CSR based on shareholders’ support (or lack thereof) for governance changes proposed by dissident shareholders.

Keywords

Citation

Cullinan, C.P., Mahoney, L.S. and Roush, P. (2016), "Corporate social responsibility and shareholder support for corporate governance changes", Social Responsibility Journal, Vol. 12 No. 4, pp. 687-705. https://doi.org/10.1108/SRJ-10-2015-0161

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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