Performance shortfall and CSR strategy: The moderating effects of board size, board tenure and sustainability compensation toward senior executives
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2024-07-11
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en
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This study examined the negative effect of performance shortfall on organizations’ CSR strategies of by comparing their organizational performance with both historical and social aspirations separately. Additionally, it investigated the moderating effects of board size, board tenure, and sustainability compensation incentives towards executives and how they influence the negative relationship between performance shortfall and CSR. Data from the LSEG database covering 623 organizations from S&P500 during the years 2017-2022 was analyzed by using multiple regression analysis. The results indicated that less than half of the S&P 500 organizations experienced performance shortfalls. There was no discovered interaction effect by the moderators: board tenure and sustainability compensation incentives. Contrary the moderator board size showed a positive influence on the relationship between performance shortfall (from historical aspiration) and CSR strategy. These findings suggest that managers should focus on encouraging larger boards and consider sustainability compensation incentives as they increase CSR strategies while avoiding longer board tenure as it has negative effect on CSR strategies. Future research should focus on analyzing another sample or sample in another country as results can differ from these findings.
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Faculteit der Managementwetenschappen