Political directors and corporate social responsibility: Are political ideology and regional identity relevant?

Abstract

AbstractThis study analyzes the influence of directors with political connections on corporate social responsibility (CSR). Using a sample of Spanish savings banks (cajas) during the period 2004–2013, we analyze the influence of political directors on the CSR of these entities, focusing on their ideology and regional identity. Our results indicate that the higher the proportion of directors with political ties on the board, the greater the allocation of resources to CSR activities. In addition to this positive effect of board politicization, we find that political directors’ liberal ideology positively affects CSR, both directly and in moderating the relationship between political directors and CSR. Our results also validate that political directors’ regional identity boosts the positive effect they have on CSR. Finally, we encounter various differences depending on the nature of the projects funded through CSR. Therefore, our study demonstrates the importance of delving into the characteristics of political directors to elucidate their effects on corporate policies.