THE EFFECT OF DIGITAL TRANSFORMATION ON CORPORATE SOCIAL RESPONSIBILITY (CSR). THE MODERATING ROLE OF BOARD CHARACTERISTICS
Muhammad Fuzail

This study aims to fill this gap by exploring the relationship between digital transformation and corporate social performance from the perspective of CEO characteristics, board characteristics, board structure, and institutional ownership. Pakistani and Indonesia listed companies from 2011 to 2021 were taken as the original data- the moderating effect of the CG was tested by using the moderating effect model. We will find that digital transformation can significantly improve corporate social performance or not.

Abstract

The objective of this study addresses a gap in the literature on corporate governance and corporate social responsibility (CSR) by investigating whether and how CEO characteristics, board characteristics, board structure, and institutional ownership moderate the relationship between digital transformation and corporate social responsibility. Digital transformation, CEO characteristics, board characteristics, board structure, and corporate social performance are increasingly important in the field of corporate sustainability. However, despite the growing literature on digital transformation, there is a gap of literature that considers the moderating role of CEO characteristics, board characteristics, board structure and institutional ownership.
This study aims to explore the moderating role of Corporate Governance (CEO characteristics, board characteristics, board structure, and institutional ownership) in the relationship between digitalization and corporate social performance.
How the change of corporate governance affects the relationship between digital transformation and corporate social responsibility based on the perspectives of corporate governance theory and resource dependency theory deserves to be explored in depth. Corporate governance theory states that the corporate governance has a core influence in aligning corporate strategy and achieving corporate sustainable development (Sahar et al., 2018). With the rapid development of digital technologies, digital transformation is seen as an opportunity to improve corporate productivity and corporate environmental & social performance, which means that the corporate governance needs to make corresponding decisions to respond to the changing external environment (Westerman & Bonnet, 2015). Secondly, based on resource dependency theory, the corporate governance is seen as a resource provider of the company, namely, different CEO characteristics, board characteristics, board structure, and institutional ownership bring multiple resources (e.g., technology, contacts and information) to accelerate digital transformation and address environmental & social issues (Orazalin & Baydauletov, 2020). The corporate governance may provide a wealth of funding, technology, and experience for the digital transformation, reducing the risk of digital transformation (Davis & Cobb, 2010). Therefore, we argue that the impact of digital transformation on corporate social performance is different under different CEO characteristics, board characteristics, board structure, and institutional ownership. Given the availability of data, we drew on existing research and described corporate governance characteristics from four perspectives: CEO characteristics, board characteristics, board structure, and institutional ownership.

Keywords: Digital Transformation, CSR, Coroprate Governance

Topic: Financial management (colloquium)