Does higher share of women in boardrooms of firms translate into higher corporate social responsibility (CSR) spending directed towards sustainability? Using a quasi-natural experiment stemming from the policy mandating women’s representation on the board of directors in India, this article documents evidence of female leaders potentially increasing the CSR spending and directing it towards sustainability issues.

Over the past two decades, policymakers across countries have introduced gender diversity initiatives – ranging from voluntary guidelines to mandatory board quotas – to increase female representation in corporate decision-making bodies. Parallel to this development, Corporate Social Responsibility (CSR) has become an important mechanism through which firms engage with stakeholders, address environmental and social externalities, and strengthen long-term sustainability. An expanding body of literature suggests that these two developments are closely linked: gender diversity in boardrooms appears to shape firms’ CSR priorities, expenditures, and outcomes.

It is well established that women’s participation in public governance changes public good provision (Chattopadhyay and Duflo 2004). We know much less about what women’s representation does to policy decisions in private firms. What is true of public governance may not hold in private firms, which are driven by profit-maximising motives. Of particular interest are CSR policies, since they are less likely to influence profitability outcomes and come under the direct influence of the board (See Board’s Role in Corporate Social Purpose).

Read more at: https://www.ideasforindia.in/topics/social-identity/female-leadership-and-corporate-social-responsibility