Board Network and CSR Decoupling: Evidence From China

Weiqi Zhao; Ma Zhong; Xinyi Liao; Chuqi Ye; Deqiang Deng

doi:10.3389/fpsyg.2022.815341

Board Network and CSR Decoupling: Evidence From China

Front Psychol. 2022 Mar 11:13:815341. doi: 10.3389/fpsyg.2022.815341. eCollection 2022.

Authors

Weiqi Zhao¹, Ma Zhong¹, Xinyi Liao¹, Chuqi Ye¹, Deqiang Deng¹

Affiliation

¹ School of Economics and Management, Nanjing Forestry University, Nanjing, China.

Abstract

This paper investigates the influence of board network centrality on corporate social responsibility (CSR) decoupling. CSR decoupling refers to the gap between corporate internal and external actions in CSR practices. Specifically, we measure CSR decoupling as the difference between corporate social disclosure (CSD) and corporate social performance (CSP). This paper uses a sample of Chinese A-share listed firms during 2009-2018, takes the technical dimension score (T-score) and content dimension score (C-score) of RKS ratings as proxies of CSD and CSP, and obtains CSR decoupling as the difference between CSD and CSP. Our results show that (1) board network centrality is positively related to over-decoupling in the pre-adoption period (2009-2014) of the new environmental law but negatively related to over-decoupling in the post-adoption period (2015-2018) and (2) centrality is not related to under-decoupling in the pre-adoption period but a significantly positive related in the post-adoption period. Our finding reveals a complex role of the board network in CSR practices in China.

Keywords: CSR washing; decoupling; director social network; emerging market; environmental, social and governance (ESG); symbolic and substantive strategy.