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Introduction
In recent years, the domain of corporate social responsibility (CSR) has attracted an increasing amount of interest from both professionals and scholars around the globe. Several of them begin to argue that companies should be evaluated not only according to their economic success and financial performance but also on their social responsibility. (Rouf and Hossan, 2021). The aim of this study is to conduct an investigation on the impact of the board composition on the CSR performance of companies, specifically in the Pharmaceuticals and Oil & Gas industries in the United Kingdom (UK) between 2017 and 2021. However, Board composition can be defined as mixed characteristics of board members, such as the number of board directors (board size), which includes both executives or non-executives (Board Independence) who have no involvement with the daily operations of the company in addition to another characteristic which is (board diversity) including gender, skills, and qualifications (van Essen, Engelen and Carney 2013; CFI, 2023).
Some Sources that can be used:
The Impact of Board Diversity and Gender Composition on Corporate Social Responsibility and Firm Reputation
Bear, Stephen ; Rahman, Noushi ; Post, Corinne
Dordrecht: Springer
Journal of business ethics, 2010, Vol.97 (2), p.207-221
BOARD DIVERSITY AND GENDER COMPOSITION ON CORPORATE SOCIAL RESPONSIBILITY AND FIRM REPUTATION IN INDONESIA
Margaretha, Farah ; Isnaini, Ratna
Petra Christian University
Jurnal manajemen dan kewirausahaan, 2014, Vol.16 (1), p.1-8
ESG investing: Spotlight on board composition
Metairie: BridgeTower Media Holding Company
New Orleans CityBusiness, 2021
The impact of board composition on the level of ESG disclosures in GCC countries
Arayssi, Mahmoud ; Jizi, Mohammad ; Tabaja, Hala Hussein
Bingley: Emerald Publishing Limited
Sustainability accounting, management and policy journal (Print), 2020, Vol.11 (1), p.137-161
Board Composition and ESG Disclosure in Saudi Arabia: The Moderating Role of Corporate Governance Reforms
Chebbi, Kaouther ; Ammer, Mohammed Abdullah
Basel: MDPI AG
Sustainability (Basel, Switzerland), 2022, Vol.14 (19), p.12173
Board composition and diversification decisions of UK listed companies: a panel data analysis
McCann, M
Inderscience, 2016-12
ESG investing: Spotlight on board composition
Metairie: BridgeTower Media Holding Company
New Orleans CityBusiness, 2021
ESG (Environmental, social and governance) performance and board gender diversity: The moderating role of CEO duality
Romano, Mauro ; Cirillo, Alessandro ; Favino, Christian ; Netti, Antonio
Basel: MDPI AG
Sustainability (Basel, Switzerland), 2020, Vol.12 (21), p.1-16
https://www.frontiersin.org/articles/10.3389/fpsyg.2020.552152/full
https://www.diligent.com/en-gb/blog/best-practices-for-board-composition/
The study found that (1) the higher the representation of women on a firm’s board, the more likely the firm is to form sustainability-themed alliances, and (2) the higher the representation of independent directors on a firm’s board, the more likely the firm is to form sustainability-themed alliances (From Board Composition to Corporate Environmental Performance Through Sustainability-Themed Alliances
Post, Corinne ; Rahman, Noushi ; McQuillen, Cathleen
Dordrecht: Springer
Journal of business ethics, 2015, Vol.130 (2), p.423-435)
Bloomberg Launches Its Own ESG Scores
Napach, Bernice
New York: ALM Media Properties, LLC
ThinkAdvisor, 2020
In yet another sign of the growing popularity of sustainable investing, Bloomberg is launching proprietary ESG scores.
The initial offering includes environmental and social, or ES, scores for 252 oil and gas companies, and governance (board composition) scores for more than 4,300 companies in multiple industries. The scores are available to Bloomberg terminal users.
Bloomberg said it’s starting ES scores withthe oil and gas sector because these companies typically provide “stronger disclosure data” than others. Also, they account for more than half of carbon dioxide emissions related to fuel combustion and generate 15% of global energy-related greenhouse gas emissions, according to the International Energy Agency.
The board composition (or Governance) scores assesses board diversity, as well as the board supervision of corporate management and any risks within a board’s structure.
Boards are ranked acrossfour key focus areas: diversity, tenure, over-boarding (when a board member sits on too many individual boards of directors) and independence.
“ESG data is critical to the investment process,” said Patricia Torres, global head of Bloomberg Sustainable Finance Solutions, in a statement. “By providing transparent ESG data and scores, we are helping investors decode raw data that is otherwise hard to compare across companies.”
The scores also provide companies with “a valuable, quantitative and normalized benchmark” to highlight their own ESG performance, and they give investment and financial professionals “transparent scoring methodologies and underlying data” that help them make informed decisions, said Torres.
More Details on Offering
The new proprietary ESG scores are data-driven measures of corporate ESG performance across multiple financial, business and industry issues, which investors and advisors can use to compare one company’s corporate practices to another within its industry.
They are “fully transparent” about their methodology and the company reported data that underlies them, according to Bloomberg.
In addition to ESG scores, the news and data service offer includes data-driven insights that support ESG integration within the investment process, such as analytics and research workflows, access to news and research and standardization of company and third party data.
Multiple studies from Morningstar and S&P Global, which launched its own proprietary ESG scores in May, and others have shown that investments in companies with high ESG scores and funds that invest in those companies tend to outperform other companies.
More recently, Harvard Business School Professor George Serafeim and State Street Associates researchers found companies that protected their labor forces and supply chains during this year’s stock-market drawdown saw more net inflows from institutional investors and better returns than their industry peers.
See: State Street Rolls Out ESG Version of Popular ETF
Copyright ALM Media Properties, LLC Aug 11, 2020
Based on this article, I believe this can be included as one of the limitations , as the data pulled out from Bloomberg was missing the G score, and I had to check Refinitiv
References
CFI, 2023. What is an Independent Director? [online]. . Available at: https://corporatefinanceinstitute.com/resources/career/independent-director/ [Accessed 4 April 2023].
Palmer, J., Board Composition (Overview, Definition, and Examples) [online]. . Available at: https://www.onboardmeetings.com/blog/board-composition-overview-definition-examples/ [Accessed 4 April 2023].
Rouf, M.A. and Hossan, M.A., 2021. The effects of board size and
board composition on CSR
disclosure: a study of banking
sectors in Bangladesh. Humanomics, 37 (1), 105-121.
van Essen, M., Engelen, P. and Carney, M., 2013. Does “Good” Corporate Governance Help in a Crisis? The Impact of Country- and Firm-Level Governance Mechanisms in the European Financial Crisis, Corporate governance : an international review. HOBOKEN: Blackwell Publishing Ltd, 21 (3), 201-224.