The Impact of Governance on Corporate Social Performance: An Examination of the Apparel and Footwear Industries

By Kathleen Hertz Rupley.

Published by The International Journal of Sustainability in Economic, Social and Cultural Context

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The apparel and footwear industries are under constant scrutiny from environmental and consumer organization stakeholders regarding production in developing countries. Concerns include pollution, minimum wages, child labor, and factory safety standards. Companies in these industries are therefore very cognizant of social issues and corporate social responsibility (CSR). Given the rising emphasis of CSR and the importance of board governance, I examine the relation between corporate social performance (CSP) and attributes of the board of directors, company ownership, and board committees. Based on a sample of 65 apparel and footwear firms compared to a size-matched sample, I empirically test whether governance attributes are associated with CSP and whether the attributes associated with CSP differ for the apparel and footwear sample compared to the matched sample. Results suggest that while the governance attributes of the apparel and footwear firms do not vary significantly from the matched sample, the features associated with CSP differ between the samples. While size, institutional ownership and board committee attributes are significantly associated with CSP for the apparel and footwear firms, board of director expertise appear to be the main driver of CSP for the matched firms.

Keywords: Corporate Social Performance (CSP), Corporate Social Responsibility (CSR), Corporate Governance, Board Committee Synergies,, Apparel and Footwear Industries

The International Journal of Social Sustainability in Economic, Social and Cultural Context, Volume 8, Issue 4, pp.113-126. Article: Print (Spiral Bound). Article: Electronic (PDF File; 4.562MB).

Dr. Kathleen Hertz Rupley

Assistant Professor, School of Business Administration, Accounting Area, Portland State University, Portland, OR, USA

Kathleen Rupley, CPA (Oregon), received a B.S. from the University of Montana and a Ph.D., from the University of Washington. Dr. Rupley’s teaching experience includes financial accounting, audit, and teaching effectiveness at the undergraduate and graduate levels at the University of Washington and Portland State University (PSU). She received the University of Washington Business School Ph.D. award for teaching excellence in 2006 and the PSU Excellence in Undergraduate Teaching Award in 2009 and 2011. Her research interests include corporate governance, internal controls, corporate social responsibility, and auditor changes. Dr. Rupley’s research has been published in Contemporary Accounting Research, Research in Accounting Regulations, and Corporate Ownership and Control. Prior to obtaining her Ph.D., Kathleen worked in the audit practice of KPMG LLP in Portland, Oregon as an audit manager.