Abstract

The purpose of this study is to understand the evolution of the notion of responsibility of the corporation and to analyte its operationalization in the organizational context. The relationship between board of directors' composition and Corporate Social Responsibility (CSR) is the key element of the study. Its originality resides in the introduction of the firm's financial performance (measured by Tobin's q and ROE) as a moderator of the relationship. The theory of pluralism (Molz, 1988; 1995) is used in this study to classify different board typologies into two general board types: managerial dominated and pluralistic boards. The sample for this study is drawn from a population of Canadian firms listed on the Toronto, Montreal or Alberta Stock Exchange. 42 firms were selected for the study on the basis of two sub-samples. The first sub-sample consisted of socially responsible firms taken from the list of the Top 50 Canadian Corporate Citizens first published in the May 1997 edition of the Financial Post. The second sub-sample, a matched-paired sub-sample, consisted of firms considered as less socially responsible and selected according to an industry matching criteria. The positive relationship between pluralism and CSR implied but not proved in past research (Molz, 1995) was supported in this study. However, the moderating effect of financial performance on the relationship between pluralism and CSR was not supported. Possible causes for the rejection of the hypothesis are presented and discussed as well as propositions for further research.