The Impact of Board Gender and Nationality Diversity on Corporate Human Rights Performance in Different Institutional Contexts

Abstract

Research Question/Issue

The duty of businesses to observe human rights (HR) is garnering great interest among corporations, researchers, and policymakers. However, little is known yet about the organizational drivers that make firms pursue higher levels of corporate human rights performance (CHRP). In an attempt to fill this gap, we present the first global study on the influence that board gender and nationality diversity have on CHRP.

Research Findings/Insights

We evaluate panel data of 548 companies worldwide from 2012 to 2021 by using the two-step system generalized method of moments (GMM) and a moderation analysis. Our results show that board gender diversity has a positive effect on CHRP, but this impact is weaker in institutional settings where patriarchal stances prevail. We also find that board nationality diversity affects CHRP positively only in firms from countries with a network-oriented approach toward corporate governance.

Theoretical/Academic Implications

These findings help to further differentiate CHRP drivers from generic sustainability antecedents and uncover the relevance of adopting an institutional lens when delving into the rationale of CHRP. In this regard, we make a call for future analyses in this field to acknowledge national gender equality levels and societies' corporate governance orientation as potential boundary conditions.

Practitioner/Policy Implications

Our results may guide companies on how to reduce corporate risks associated with HR violations by incorporating women and foreigners on their boards. They may also encourage businesses and policymakers to boost gender equality both on corporate boards and within societal values as both these aspects may be key for safeguarding HR internationally.