Corporate Governance, Diversity, and Corporate Crime: Does Offense Type Matter?

• In Event: Understanding Corporate and Organizational Crime

Abstract

In spite of a body of evidence showing that board and gender diversity positively affect firm financial and social performance as well as company reputation and value, there is scant research on the effect of diversity on corporate crime. The limited work that does exist focuses mainly on financial crime. When the conception of diversity is extended beyond gender, research reveals less consistent positive effects on firm outcomes. In this paper, we build on prior research by exploring the effect of both gender and race/ethnic diversity on corporate offending but we extend previous studies by adding different types of corporate crime to the analysis. We use panel data (1996-2013) on the S & P 1500 companies to link financial, environmental, and anti-competitive violations to firm characteristics and changes in those characteristics from year-to-year to assess whether the previously observed inhibitory effect of gender diversity on financial crime is also manifest for different forms of diversity and environmental and anti-competitive violations. Findings are subjected to a number of robustness checks.

Authors

• Sally S. Simpson, University of Maryland

• Miranda A. Galvin, University of Maryland

• Jacqueline Lee, University of Maryland

• Jessica Deitzer, University of Maryland

• Gerald S. Martin, American University

• Debra Shapiro, University of Maryland

• Christine Beckman, University of Maryland