Board Characteristics and Corporate Social Responsibility Assurance: What Factors Matter in the U.S. Market?

Abstract: This study aims to examine the influence of board characteristics - the critical components in the corporate governance mechanisms - on the adoption of corporate social responsibility (CSR) assurance. Based on a sample of 328 listed U.S. firms included in the S&P 500 Index at year-end 2017, we use logistic regression models to investigate the relationships between four typical board characteristics and the firms' CSR assurance decision. Our results confirm that a board with a larger size and a higher proportion of female directors is more likely to adopt CSR assurance in the U.S. market. However, inconsistent with our predictions, we do not find any impact of board independence and board tenure on the companies' CSR assurance decision. Through extended research, we confirm the critical mass theory regarding the board gender diversity's impacts, find a fact about the U.S. market that firms in the environmentally and socially sensitive industries are prone to choose non-accounting firms as assurance providers, and observe a positive effect of an extended diversity factor board nationality diversity. Our findings not only fill the research gap in the currently underresearched CSR assurance field, but also have practical meanings for the CSR assurance providers, consumers and standard setters.