Board Nationality Diversity and Corporate Social Responsibility

The study examines the relation between the nationality and educational background diversity of directors serving on corporate boards and the firms’ corporate social responsibility (CSR). We measures nationality diversity by directors’ national citizenship and educational background diversity by countries from which they earned their undergraduate and post undergraduate degrees. It measures firms’ CSR from the MSCI ESG ratings. Using a sample of U.S. firms, we find that having greater board nationality diversity and educational background diversity are positively associated with CSR. Our findings suggest that improving director nationality diversity and educational background diversity could improve firms’ social performance. Our study also shows that the increasing trend of foreign nationals in the U.S. boards could shift the focus of U.S. corporations to be more stakeholder-oriented.