Corporate Philanthropy: Do Board Gender Diversity and CEO Gender Matter?
Divesh S. Sharma, Vineeta D. Sharma, and Lucy F. Ackert
Coles Working Paper Series, FALL19-01, November 2019
Overview We examine the relationship between boardroom gender diversity and corporate philanthropy. Specifically, we hypothesize associations between corporate philanthropy and (i) the board’s gender diversity, (ii) the CEO’s gender, and (iii) the genders of CEOs serving as board chairs. Although society acknowledges the value of corporate philanthropy and women in the boardroom, for regulators and corporate boards, corporate philanthropy is a discretionary social responsibility, and the advancement of women to the boardroom is also voluntary; no US legislation mandates female appointments as CEOs or directors. Using a relatively large dataset of 10,573 observations on the philanthropy of listed companies as a “natural laboratory”, we find that a higher percentage of female independent directors on the board, a female CEO, and female CEOs serving as board chairs have significantly positive effects. Our results are robust to selection bias and endogeneity, unlike the few prior studies on gender and corporate philanthropy. We also find that the critical mass at which board gender diversity influences philanthropy is two independent, female directors, and three or more have an even greater effect. Our study has important implications for gender and governance research and, in practice, for various stakeholders.
34 | Working Papers
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