While a number of studies explore a direct relationship between board diversity and financial performance indicators, within the project it is proposed to investigate how corporate social responsibility mediates this relationship in the context of the transitional Russian economy. Moreover, in the project we will explore the relationship between the internationalization of the largest Russian MNEs and the level of their CSR disclosure, and how board diversity and the location of international activities moderate this relationship. The focus on Russian companies brings new insights on this type of relationships and opens the discussion about the effectiveness of corporate governance systems in emerging and transition economies. Stakeholder and agency theories are used for developing the theoretical background.
The board of directors is a key corporate governance mechanism that fulfills strategic, monitoring and advisory roles while supporting a firm’s access to valuable resources (Adams et al., 2010; Hillman et al., 2003). Unsurprisingly, the structure and diversity of corporate boards have become an important topic in academic literature (e.g. Johnson et al., 2013 for a review). Coffey and Wang (1998, p. 1596) define board diversity as “variation among its members that may derive from multiple sources such as expertise and managerial background, personalities, learning styles, education, age and values”. Generally speaking, diverse boards should result in improved performance due to the unique resources directors bring through their experience, knowledge, business and social ties (Benouri et al., 2018). However, the empirical evidence on link between board diversity and firm performance remains inconclusive. For example, while some authors find a positive relationship between performance and board diversity measured by the share of women (e.g. Carter et al. 2003; Campbell and Minguez-Vera 2008) and foreign board members (e.g. Oxelheim and Randoy, 2003), others report a negative (e.g. Adams and Ferreira 2009; Bøhren and Strøm 2010; Sun et al., 2015) or insignificant relationship (Carter et al., 2010; Shrader et. al, 1997). However, due to inconclusive results explained by a “complex and indirect” relationship between board diversity and performance indicators, Forbes and Milliken (1999, p. 490) call for further research. Some authors also argue that there is a need to uncover mediating variables that explain this relationship in more details (Miller and Triana, 2009). One such mediator, that can help explore the link between board diversity and firm’s performance indicators, is corporate social responsibility (CSR) (Bear et al., 2010).
CSR reporting improves company’s transparency and reputation (Branco and Rodrigues, 2006; Pfau et al., 2008), reducing risks (Fombrun et al., 2000; Vanhamme and Grobben, 2009) and enhancing competitive advantage (Jensen, 2002; Baron, 2009). Past research has treated the link between corporate governance and CSR reporting on the one hand, and the link between corporate governance and overall firm performance on the other hand, as unreated relationships. We suggest that this is an oversight. From an agency theory perspective, the role of the board of directors is critical not only in improving financial performance, but also carries important monitoring functions in an attempt to resolve, or at least mitigate, agency conflicts between management and shareholders. As „transparency is a quality of corporate social responsibility communication that enhances the relationship between the investors and the company” (Fernandez-Feijoo et al., 2014, p. 53), we consider CSR as an incremental tool for the board of directors in establishing a reliable and trustworthy rapport with a wide range of stakeholders. We thus offer a comprehensive examination of the collective effects of corporate governance (board composition), CSR and firm performance, while controlling for both simultaneity bias and endogeneity (Jo and Harjoto, 2011).
Although CSR is widely spread and accepted in many countries, for Russian companies it is still underdeveloped (Fifka and Pobizhan, 2014; Li et al., 2010) because there are no legal requirements and obligations for companies to disclose CSR information. At the same time, most Russian firms are characterized by a weak corporate governance, comparably low shareholder protection rights and concentrated ownership (Guryanov et al., 2019; Grosman et al., 2019). Hence, we deem it important to investigate the impact of both board composition (diversity), CSR on the performance and internationalization experience of this particular transition-economy firms. The goal of the project is to identify how board diversity, measured as women, foreign- and state- representatives on boards of directors and internationalization of companies affect company’s CSR disclosure and firm performance in the context of the Russian economy.

In order to achieve the goal, it will be necessary
1. To create the theoretical background in the framework of agency, stakeholder, institutional and internationalization theories;
2. To make an empirical study by collecting data on large Russian public companies;
3. To analyze, explain and discuss the obtained results;
4. To develop recommendations for Russian companies, government and other stakeholders on the policies and approaches regarding CSR disclosure, corporate governance mechanisms and board composition.
Realization of the tasks is possible due to the availability of scientific research and recognition of professional experience in the field of the project obtained by project participants, as well as to the availability of primary data sources.
The research methodological base includes methods of scientific generalization, system analysis, problem-oriented analysis, classification methods, case analysis method. The theoretical basis of the study is the stakeholder theory, institutional theory, theory of internationalization and agency theory.

Stages of the prjict implementation:
The first stage: 15.06.2020 - 31.12.2020.

Preliminary work related to the organization of the research process, data collection and analysis.

The second stage: 01.01.2021 - 15.06.2021

Preparation and submission of at least one manuscript to the international journal, preparation and submission of at least one manuscript to Russian journal, organization of a scientific seminar (sections within the conference, publication of a scientific report), publication of the news on the results of the project at GSOM SPbU website.
The relevant experience of the team includes a list of academic publications in leading international and Russian journals, several developed and published teaching cases, as well as a number of successfully implemented scientific and educational projects.
Short titleCSR Disclosure
Effective start/end date15/06/2015/06/21

ID: 60419171