Peerages, corporate social responsibility and tax avoidance: A systematic literature review and UK board-level empirical evidence

Abstract

This thesis seeks to contribute to the extant literature by addressing the knowledge gap in board diversity, Corporate Social Responsibility (CSR), and tax avoidance (TAD). This is achieved by conducting the following three separate but closely related studies: (i) a systematic literature review of the existing theoretical and empirical literature on corporate boards and relative firm outcomes; (ii) an analysis of the association between peerages on boards and CSR performance; and (iii) an investigation of the association between peerages on boards and tax avoidance behaviour. Considering all three studies, this thesis highlights the possible effects of board attributes’ diversity, particularly social status characteristics, in shaping board and corporate decisions.
The first paper critically reviews existing good-quality journal articles on corporate boards (CBs) and corporate outcomes (COs). This study aims to define different themes in CBs and COs through the systematic literature review (SLR) approach to identify the research gaps in the current board of directors (BODs) studies. A triangle framework of board review (theory, determinants and outcomes) is built to help better understand the nature and impact of CBs. In this review, the researcher adopts three databases, a list of keywords strings, and specific selection criteria to conduct SLR. 511 articles from good-quality journals are involved in the analysis. This SLR notices that theories applied in existing studies can be divided into four perspectives: (i) economic and governance perspective, (ii) resource-oriented perspective, (iii) regulatory perspective, and (iv) psychological, sociological, and other perspectives. Besides, there are four levels (institutional, corporate, group and individual) of CBs’ determinants. Furthermore, prior studies on BODs could be divided into seven main outcome themes: CSR, earnings management, audit quality and accounting conservatism, disclosure, firm financial performance, compensation, risk-taking and acquisition, among others.
The findings of the SLR are as follows: First, various theoretical perspectives can be used to support the explanation of CBs studies and several theories can be applied together in some cases. Second, BODs are affected at multiple-levels and those determinants may interact with each other. Third, there is a strong relationship between different aspects of CBs and various themes of COs. Last, as components of CBs, social attributes like gender or PHs have a significant relationship with COs like CSR, whose effect cannot be ignored, and thus require further investigation.
As a response to the findings in the first paper, the second paper aims to examine the relationship between PHs and CSR, as well as the moderating effect of CG on the relationship between PHs and CSR. A multi-theoretical framework based on the social status, agency, resource dependency, stakeholder and legitimacy theory are adopted to help develop hypotheses. With the evidence of 404 FTSE ALL SHARE firms in the United Kingdom, a sample from the years 2002 to 2018 is used in this study. The OLS regression results indicate a significant relationship between PHs and CSR, particularly the environmental dimension of CSR. Furthermore, the results show the moderating effect of CG on the PH and CSR nexus. The results are robust, and the above findings support the multi-theoretical framework.
The final paper investigates the relationship among PHs, tax avoidance and CSR. A multi-theoretical framework is adopted when developing the hypotheses. UK FTSE ALL SHARE firms from the years 2000 to 2019 are used as sample to conduct multivariate regressions. The OLS regression results are robust and indicate a significant relationship between PHs and tax avoidance as well as the moderating effect of CSR on the nexus.
Keywords: Corporate governance, board diversity, peerages, damehood, knighthood, CSR, ESG, tax avoidance, social status, systematic literature review

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ORCID for Collins Ntim: orcid.org/0000-0002-1042-4056

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