Abstract
Purpose – The purpose of this paper is to provide evidence on the relationship between EM and CSR performance with the moderating effect of CSR controversies. Prior literature has focused on the initial connection between the two concepts, finding contrary results. This paper addresses existing gap in the respective literature by raising the question: If a company engages in EM practices, will it also be open to adjust the image of its CSR performance?
Design/methodology/approach – This study uses a multi-country data set with multiple measures for CSR performance. Models are conducted as multivariate unbalanced GLS panel regressions using 3.362 firm year observations between 2014 and 2022. The superior model includes a moderator variable and a board-based set of control variables.
Findings – A significant positive relationship between AEM and CSR performance has been found. Results for subcategories in the model show that there is a significant relationship when moderating with CSR controversies for income increasing AEM and the individual subcategories, but not for the interaction term. The findings stress the importance of board committees in view of their monitoring of company decisions regarding CSR activities and the presentation of financial statements.
Research implications – This paper shows the crucial aspect of the reliability of CSR performance when analysing the effect of EM and CSR. In essence, it shows that AEM and REM are affected by different influences in their relationship with CSR performance.
Originality/value – This study provides key contributions to existing literature as it is the first paper that includes the moderating effect of CSR controversies for AEM and REM.