Ethical guardians: The multifaceted impact of CSR committee on executives manipulation tendencies

Abstract

By acknowledging the crucial role of the CSR committee in shaping ethical practices within organizations, this research aims to uncover potential connections between corporate ethical supervisory and the prevalence of manipulative actions by corporate executives. Using a sample of Us-listed companies, the findings support the notion that robust CSR frameworks such as the presence of a CSR committee reduce the motivations of manipulative tendencies by executives (measured by restatements). Contrary to conventional beliefs, our findings suggest that the size of the CSR committee does not influence the manipulative tendencies, whereas, the strength of female directors and a higher number of independent directors on the CSR committee has a positive and substantial influence on ethical decision-making, reducing the inclination towards manipulative intentions. Supporting the stakeholder theory notion, we suggest firms with CSR committees display a genuine commitment to stakeholder interests, exhibiting better performance in both social and financial activities. Our study contributes to the ongoing discourse on corporate governance, ethical decision-making, and the broader implications for organizational behavior and outcomes.