Received: 25 October 2020 Revised: 24 February 2021 Accepted: 11 March 2021

DOI: 10.1002/csr.2141

RESEARCH ARTICLE

Board structure, financial performance, corporate social

responsibility performance, CSR committee, and CEO duality:
Disentangling the connection in healthcare

Ali Uyar1 | Cemil Kuzey2 | Merve Kilic3 | Abdullah S. Karaman4

1
CERIIM, Accounting Department, Excelia
Business School, La Rochelle, France
2
Arthur J. Bauernfeind College of Business,
Murray State University, Murray,
Kentucky, USA
3
Department of International Trade and
Business, Samsun University, Samsun, Turkey
4
College of Engineering and Technology,
American University of the Middle East,
Kuwait
Correspondence
Ali Uyar, CERIIM, Excelia Business School,
France, 102 Rue de Coureilles, 17000 La
Rochelle, France.
Email: aliuyar@hotmail.com
Abstract
Despite the growing importance of responsible behavior in the healthcare sector,
research on corporate social responsibility (CSR) in association with board structure
is scarce. Hence, the objective of this study is twofold: (1) to test whether a board
structure is associated with firm financial and CSR performance and (2) whether the
CSR committee and CEO duality moderates this association in the healthcare sector.
Examining the moderation of CSR committee is important to understand whether
CSR committee strengthens or weakens the link between female directors and CSR
performance. Moreover, CEO duality's moderation will highlight whether powerful
CEOs are a barrier for female directors' monitoring role. The data for the study was
derived from the Thomson Reuters Eikon database for the years between 2011–
2018. Overall, the results suggest that while female directors contribute to firm per-
formance, CEOs with dual roles and larger boards harm firm performance. Further,
independent directors have a limited contribution to CSR performance whereas they
have no contribution to financial performance. Moderation analysis shows that CSR
committees and female directors are not the replacement of one another; they are
both needed and beneficial to the corporate structure. Although CEOs with a dual
role impair the performance of a firm, they do not exert considerable influence on
the other directors. As one of the important functions of a board is monitoring, these
findings assist healthcare firms to configure their boards to improve their monitoring
functions. The results are therefore helpful in terms of alleviating agency costs and in
appeasing stakeholders.

KEYWORDS
board structure, CEO duality, CSR committee, CSR performance, financial performance,
healthcare, stakeholder theory, sustainable development

JEL CLASSIFICATION

G34; L25

Board structure specifies board size, independence and gender diversity.

Firm performance is proxied by Tobin Q (market-based performance) and Return on assets (accounting-based performance).
CSR performance is measured by composite ESG (environmental, social and governance score), and individual environmental, social and governance scores.
CSR committee is a binary variable denoting whether CSR committee exists or not.
CEO duality shows whether the same person holds chairman and chief executive officer positions.

Corp Soc Responsib Environ Manag. 2021;1–19. wileyonlinelibrary.com/journal/csr © 2021 ERP Environment and John Wiley & Sons Ltd. 1
2 UYAR ET AL.
1 | I N T RO DU CT I O N
The healthcare industry occupies an important role in the economies
of countries, since healthcare expenditures consist of a significant per-
centage of gross domestic product (GDP), which has been gradually
rising over time (Cardinaels & Soderstrom, 2013; Galizzi &
Miraldo, 2011). In many countries, health expenditure is increasing
even faster than the GDP (Rana et al., 2020). This demonstrates the
role played by the healthcare industry in the public policy agenda
(Galizzi & Miraldo, 2011), the fiscal stability of the health system, and
the quality of healthcare services in most countries. Today, the
healthcare sector faces numerous growing challenges, including higher
operational costs, stricter environmental regulation, and intense com-
petition (AlJaberi et al., 2020). As well, consumers increasingly expect
better quality healthcare services and demand ethically responsible
behavior from healthcare professionals (Dixit, 2017). The healthcare
sector has begun to face pressures related to greening, although it is
not viewed as an environmentally sensitive sector (Zhu et al., 2018).
These challenging issues have forced healthcare companies to
reestablish their decision-making systems (Eeckloo et al., 2007), adopt
responsible behavior as an inseparable component of their gover-
nance structure (Dixit, 2017), and engage in corporate social responsi-
bility (CSR) practice. The healthcare sector's sensitivity to
environmental and social issues may enhance service quality while
contributing to the sustainable development of countries (Chiarini
et al., 2017) which may eventually contribute to human wellbeing.
In the case of the healthcare sector, there is a wide variety
of internal (i.e., doctors, nurses, physicians, and management) as well
as external stakeholders (i.e., patients, insurers, regulators,
suppliers, creditors, competitors, and community) (Cardinaels &
Soderstrom, 2013; Rohini & Mahadevappa, 2010). Decision-makers
such as a corporate board, can undertake the necessary effort with
which to ensure the implementation of best management practices in
favor of the internal stakeholders (i.e., patients and employees) while
meeting the growing demands and expectations of these multiple
stakeholders through adopting appropriate policies, strategies, regula-
tions, and initiatives (AlJaberi et al., 2020). As financial and CSR per-
formance are assumed to be the outcome of decisions made by
boards (Rao & Tilt, 2016), the composition and characteristics of a
board can be critical to achieve improved financial and CSR results.
This exemplifies the strong need to examine the way in which board
structure and composition are associated with financial and CSR
results in the healthcare sector.
We decided to focus on the healthcare sector because the litera-
ture lacks research on CSR issues in healthcare, even though sustain-
ability concerns in the sector are mounting. Further, the corporate
governance practices, policies, adoption and the association between
corporate governance and CSR policy in healthcare remain largely
unexplored (Cardinaels & Soderstrom, 2013; Jamali et al., 2010). The
study addresses this gap in the literature by examining the link
between corporate governance, firm financial and CSR performance
with a particular focus on the healthcare industry. Complexity theory
argues that a certain outcome may arise from different combinations
of numerous indicators (Ragin, 2000, 2008). From the perspective of
this theory, a single board attribute may not have a significant impact
on financial and CSR performance, whereas it may lead to higher or
lower firm performance through interacting with other board attri-
butes. Prior research has largely neglected the interaction between
board characteristics in shaping firm strategies and policies and
impacting financial as well as CSR performance. This study also aims
to fill the void in the literature by examining whether the existence of
a CSR committee and CEO duality have moderating impacts on the
association between board gender diversity, and the firm financial and
CSR performance. To bridge these gaps, this study aims to respond to
the following questions:
RQ1: Whether and how board attributes (i.e., CSR committee,
board gender diversity, board independence, board size, and CEO
duality) impact firm financial (i.e., ROA and TobinQ) and CSR
performance?
RQ2: Whether the existence of a CSR committee and CEO dual-
ity moderate the association between board gender diversity and firm
financial and CSR performance?
In doing so, this study aims to provide useful implications for
healthcare organizations to take necessary steps to structure their
boards so as to strengthen their financial and CSR performance, and
thus to improve the healthcare sector's overall performance. Examin-
ing the moderation of the CSR committee is important to understand
whether it strengthens or weakens the link between female directors
and CSR performance. Moreover, the moderation of a CEO duality
will highlight whether powerful CEOs are a barrier to the monitoring
role of female directors. By drawing on multiple theoretical fundamen-
tals and a worldwide sample, the managerial implications and general-
izability of the findings are enhanced, respectively.
This study is expected to contribute to the literature in the follow-
ing ways. First, prior corporate governance and CSR research in the
healthcare sector has been focused on a sub-sector, which includes
public hospitals,1 nonprofit hospitals (Brickley et al., 2010;
Cardinaels, 2009; Eeckloo et al., 2004; Robbins & Taylor, 2014; Rohini &
Mahadevappa, 2010), primary healthcare organizations (King &
Green, 2012), and pharmaceutical companies (Droppert &
Bennett, 2015; Nussbaum, 2009; Smith, 2008), or has been realized in
a single country (AlJaberi et al., 2020; Jamali et al., 2010; Khan
et al., 2018; King & Green, 2012; Limbu et al., 2020; Robbins &
Taylor, 2014; Torchia & Calabrò, 2018; Tuan, 2012; Tuan, 2014; Yadav
et al., 2020). Although these studies provide valuable insights into the
existing body of knowledge, their findings are bounded by a specific
sub-sector or country. This study adds to the literature by exploring
CSR performance in the healthcare sector, including a wide range of
sub-sectors such as healthcare equipment and supplies, healthcare pro-
viders and services, pharmaceuticals, biotechnology, and medical
research from an international perspective. Second, this study adopts a
more holistic approach in measuring CSR performance as compared to
studies focusing on a certain subdimension of CSR performance, such
as social (Khan et al., 2018) and environmental (Zhu et al., 2018). For
this purpose, this study utilizes a composite environmental, social, and
governance (ESG)2 score covering a wide range of indicators related to
UYAR ET AL.
environmental sustainability, social responsibility, and effective corpo-
rate governance practices. Third, although several studies have
addressed CSR issues (Jamali et al., 2010) and corporate governance
(Robbins & Taylor, 2014) in the healthcare sector, no prior study has
investigated the interaction between CSR performance and corporate
governance in that sector. Fourth, the study tests the association of
board structure with firm financial performance, which is particularly
important for shareholders who are concerned with financial perfor-
mance. By studying the two performance dimensions concurrently, this
study provides a holistic perspective, with implications for the manage-
ment of healthcare firms to achieve sustainable development. Fifth, this
is one of the few attempts to explore the moderating impact of a CSR
committee and CEO duality on the interaction between board gender
diversity and firm performance.
The rest of the paper is organized as follows. The next
section reviews and synthesizes the literature, establishes the theoret-
ical framework of the study, and develops the hypotheses. The third
section outlines the research methodology, including a description of
the sample, variables, and empirical methodology. The fourth
section reports the outcomes of the baseline, the moderation analysis
and the robustness test. The fifth section discusses the results and
draws conclusions. The last two sections provide the implications and
limitations of the study.
2 | LITERATURE REVIEW AND
T H E O R E T I C A L F R A M EW OR K
The healthcare industry currently faces more challenging issues than
in the past, such as the significant rise in healthcare costs, decrease in
governmental budgets, demographic changes, emergence of new dis-
eases and treatments, intense public and media attention, and expan-
ding market demands (Jamali et al., 2010), particularly in developing
countries and territories (i.e., Sub-Saharan Africa) (Farag et al., 2013;
Hollard & Sene, 2016). In addition to these challenges, the pressure
on healthcare organizations to act responsibly and consider their ethi-
cal obligations toward society is increasing (Limbu et al., 2020). To
survive in a competitive sector like healthcare, building a good reputa-
tion (Giannarakis, 2014; Hwang & Chung, 2018), providing a balance
between management and board responsibilities (Jamali et al., 2010),
ensuring brand advocacy (Limbu et al., 2020), and establishing strong
relations with stakeholders have become crucial (Giannarakis, 2014).
CSR activities will seek help healthcare organizations to gain a good
reputation, to strengthen their stakeholder relations, to enhance their
brand advocacy (Limbu et al., 2020), and to improve their competitive
position in the marketplace (Tuan, 2012), by which to achieve favor-
able business results, such as increased social and financial perfor-
mance (Hwang & Chung, 2018), motivated staff (Rohini &
Mahadevappa, 2010), enhanced job satisfaction (Pinzone et al., 2019),
and differentiated brand equity (Tuan, 2012).
As CSR-related issues have gained importance and prominence in
healthcare, growing attention has been paid to the barriers and drivers
of CSR practice in the healthcare sector by researchers (Droppert &
3
Bennett, 2015; Hussain et al., 2019; Khan et al., 2018;
Nussbaum, 2009). For example, using a case study approach,
Nussbaum (2009) analyzed successful CSR practices applied in phar-
maceutical companies and documented that seeing CSR as an obsta-
cle rather than an opportunity and the difficulties of extending CSR
practices to suppliers, customers, and other business partners were
found to be the most pressing CSR challenges in the pharmaceutical
sector. Poor infrastructure (Khan et al., 2018), organizational culture
(Hussain et al., 2019; Khan et al., 2018), stakeholder's disparity
(Hussain et al., 2019; Khan et al., 2018), and lack of management sup-
port (Hussain et al., 2019) were reported as being among the top bar-
riers to sustainability in the healthcare industry. With regard to the
drivers of CSR, Pinzone et al. (2015) determined that stakeholder
pressures play a significant role in encouraging the adoption of proac-
tive environmental strategies in Italian healthcare organizations. How-
ever, Seifert and Guenther (2020) determined that stakeholder
pressure only from owners and the board play roles in impacting the
implementation of environmental management systems, whereas
other stakeholders know little and care less about environmental man-
agement systems, reducing the importance of such implementation
and limiting future environmental efforts. Further, Droppert and Ben-
nett (2015) identified that reputational benefits, higher employee sat-
isfaction, long-term financial returns, better rankings in sustainability
indices, enhanced opportunities for entering into new markets, and
improved population health are primary factors that motivate pharma-
ceutical companies to engage in CSR.
A further strand of research has explored governance practice in
the healthcare sector (Brickley et al., 2010; Cardinaels, 2009; Eeckloo
et al., 2004; Goddard et al., 2000; Jamali et al., 2010; King &
Green, 2012; Pirozek et al., 2015; Robbins & Taylor, 2014; Torchia &
Calabrò, 2018; Tuan, 2014). Based on a survey, Eeckloo et al. (2004)
examined governance structure and composition, competencies, and
the functioning of boards in the Belgian nonprofit hospitals. Tuan (2014)
analyzed the relationship between CSR and the effectiveness of clinical
governance3 in Vietnamese hospitals. Although clinical and corporate
governance are similar in many aspects, they differ in scope. More spe-
cifically, while clinical governance is mainly focused on the governance
structure in a clinic or hospital, corporate governance is broader in
scope, establishing clinical governance as the most important gover-
nance measure (Jamali et al., 2010). Concerning corporate governance,
Robbins and Taylor (2014) explored the corporate governance practices
adopted by US nonprofit hospitals, documenting that such nonprofit
healthcare organizations do not fully adopt corporate governance pro-
cedures and policies. Through in-depth interviews, Jamali et al. (2010)
analyzed whether corporate governance and CSR adoption differed
between for-profit and not-for-profit hospitals in the Lebanese
healthcare sector. Based on a configurational analysis, Paolone
et al. (2021) analyzed the impact of ESG initiatives on marketing perfor-
mance in the pharmaceutical sector and determined that governance-
related scores are more influential in ensuring good marketing perfor-
mance than those related to environmental or social concerns, implying
the importance of governance pillar in achieving better firm results.
Although a growing number of studies focus on board structures and
4 UYAR ET AL.
the association between board attributes and firm performance,4 the
healthcare sector has been largely neglected in this respect. Our study
addresses this gap in the literature by examining the association
between board structure and firm performance, both in terms of finan-
cial and CSR measures in healthcare.
Agency theory indicates the presence of important problems in
the relationship between principals and agents, since their goals differ
(Fama & Jensen, 1983; Jensen & Meckling, 1976). This theory sug-
gests that governance bodies (i.e., the board of directors) should con-
trol and monitor the agents' decisions (Hussain et al., 2018). Thus,
strong corporate governance would positively influence firm financial
performance by improving board monitoring (Carter et al., 2003) and
reducing agency conflicts (Erhardt et al., 2003). CSR includes not only
meeting the needs and expectations of shareholders, but also the
social and environmental concerns of all stakeholders (Givel, 2007).
The governance system of healthcare organizations is expected to
take into consideration the needs of numerous stakeholder groups,
such as patients, which includes the older, vulnerable population as
well as children, employees, the government, and the local community
(Dixit, 2017). Stakeholder theory serves as a useful theoretical lens
and provides far-reaching insights with which to better understand
the relationship between corporate governance and CSR orientation
(Jamali et al., 2008). From the stakeholder theory viewpoint, the com-
position of a board can enhance the legitimacy of healthcare organiza-
tions, helping them to build a strong link with both stakeholders and
the community (Eeckloo et al., 2007). Furthermore, resource depen-
dence theory (Pfeffer & Salancik, 1978) provides a useful framework
with which to understand how board attributes impact financial and
CSR results. In addition to it's monitoring function, the board of direc-
tors has an important function in providing resources (Hillman &
Dalziel, 2003). From this perspective, the board of directors has a vital
role to play in ensuring the flow of critical resources (i.e., knowledge,
expertise, tenure, and personal ties) to the firm (Frynas &
Yamahaki, 2016; Hillman & Dalziel, 2003). With regard to CSR,
resources provided by directors, such as knowledge related to the
firm's environment and stakeholders may encourage firms to engage
in CSR practice, allowing them to achieve a strategic source of legiti-
macy together with long-term value creation (Godos-Díez
et al., 2018). In this context, board attributes and structures are
expected to influence the financial and CSR performance of the firm.
Differing from causal theory, complexity theory proposes more
complex relationships than cause and effect (Cuadrado-Ballesteros
et al., 2017). In the main, complexity theory argues that no single factor
sufficiently indicates a high score in a certain outcome, whereas a few
of many available complex combinations of factors can be essential
drivers of high scores for a certain outcome (Wu et al., 2014). Relying
on complexity theory, García-Ramos and Díaz (2020) stated that the
board of directors must be considered as a whole, since decisions taken
by the board do not depend upon individual characteristics (i.e., size,
independence, and diversity), but instead upon different combinations
of these characteristics. With regard to the association between board
and CSR performance, complexity theory suggests that numerous com-
binations of board attributes, such as size, independence, and diversity
can be more relevant to CSR performance than the individual attributes
(Cuadrado-Ballesteros et al., 2017), while there is more than one opti-
mal combination of attributes to achieve a higher level of CSR (Dwekat
et al., 2020). Moreover, Sinthupundaja et al. (2018) stated that a combi-
nation of multiple antecedent conditions can result in either high- or
low-proactive CSR and financial performance. In line with complexity
theory, we argue that the interaction between different board attri-
butes (i.e., CSR committee and CEO duality with board gender diversity)
may result in higher or lower financial and CSR performance. Based
upon agency, stakeholder, resource dependence, and complexity theo-
ries, this study examines whether and how board characteristics
(i.e., CSR committee, board gender diversity, board independence,
board size, and CEO duality) influence both financial and CSR
performance.
2.1 | CSR committee
One of the elements of the board structure noted in recent literature
is the existence of a CSR (i.e., sustainability) committee (Fuente
et al., 2017; Hussain et al., 2018). The existence of a CSR committee
demonstrates a board's commitment and orientation toward socially
and environmentally responsible behavior, signaling the firm's efforts
to invest in the establishment of better and stronger stakeholder rela-
tions (Hussain et al., 2018). Empirically, Hussain et al. (2018) docu-
mented that CSR committees foster greater social and environmental
performance. Likewise, Cucari et al. (2018) documented that the exis-
tence of a CSR committee is positively associated with the level of
ESG disclosures. Consistent with theoretical arguments and empirical
findings, we expect that firms with CSR committees will have greater
CSR orientation, and be more likely to engage in CSR activities. Thus,
we develop the following hypothesis:
H1. A CSR committee is positively associated with CSR performance.
2.2 | Board gender diversity
One of the most frequently used board diversity characteristics in the
prior literature is gender (Rao & Tilt, 2016). Enhanced board diversity is
likely to have a positive impact upon the controlling function of the board
and thus, to mitigate potential agency conflicts (Erhardt et al., 2003).
Reduced agency conflict between stakeholders results in greater financial
performance for their shareholders (Harjoto & Jo, 2011). Consistent with
theoretical arguments, most prior empirical studies found that firms with
a higher proportion of female directors tend to have a higher financial
performance (Erhardt et al., 2003; Kılıç & Kuzey, 2016). Therefore, we
expect that board gender diversity positively influences firm financial per-
formance, as it mitigates agency conflicts and reduces agency costs.
Thus, we suggest the following hypothesis:
H2a. Board gender diversity is positively associated with financial
performance.
UYAR ET AL.
Female directors contribute to the effective management of rela-
tions with stakeholders by fulfilling ethical and legal responsibilities of
firms (Harjoto et al., 2015), devoting firm resources to better address
demands and expectations of stakeholders (Zhang et al., 2013), thus
serving the interests of multiple stakeholders (Harjoto et al., 2015).
This, in turn, helps the firm to achieve wider stakeholder acceptance,
which leads to greater CSR engagement (Zhang et al., 2013). Further,
female directors bring different and heterogeneous decisions to board
discussions, critical for making complex decisions on voluntary prac-
tices like CSR investments (Rao & Tilt, 2016). Accordingly, empirical
research suggests a positive association between board gender diver-
sity and CSR performance (Harjoto et al., 2015; Mallin &
Michelon, 2011; Orazalin & Baydauletov, 2020; Setó-Pamies, 2015;
Shaukat et al., 2016; Velte, 2016; Zhang et al., 2013). Applying meta-
analysis, Lagasio and Cucari (2019) confirmed the significant positive
association between board gender diversity and ESG disclosure. In
this sense, we expect that boards incorporating more female directors
strengthen relations with stakeholders, act more responsible, both
socially and environmentally, and motivate firms to undertake CSR
activities. Thus, we propose the following hypothesis:
H2b. Board gender diversity is positively associated with CSR
performance.
2.3 | Board independence
One of the key issues in corporate governance is the proportion of
non-executive (i.e., independent) directors on the board (Eeckloo
et al., 2004). Agency theory suggests that boards should consist of
more independent directors to mitigate managerial opportunism and
agency conflicts (Shaukat et al., 2016). In line with agency theory,
most corporate governance codes suggest that boards should consist
of a majority of independent directors who do not perform a manage-
ment function in the organization and its subsidiaries (Eeckloo
et al., 2004). Having a greater number of independent directors on a
board improves board monitoring (Fama & Jensen, 1983) and reduces
agency costs (Naciti, 2019). Consistent with these arguments, we
expect that firms with more independent directors on their boards
would ensure an effective corporate governance system, which in
turn improves the quality of the decision-making process related to
economic issues, enabling them to achieve better financial results.
Thus, we develop the following hypothesis:
H3a. Board independence is positively associated with financial
performance.
Stakeholder theory posits that independent board members may
be in a better position to represent external stakeholders and will not
be driven by vested interests in the organization (Kaymak &
Bektas, 2017). Board independence inhibits possible behaviors that
deviate from social interest (Naciti, 2019) and fosters companies to
undertake socially and environmentally responsible practices. Prior
5
empirical research documented that effective corporate governance
mechanisms, including independent boards, encourage a firm to engage
in CSR practice (Shaukat et al., 2016; Zhang et al., 2013) and reporting

(Cucari et al., 2018; Gallego-Alvarez & Pucheta-Martínez, 2020;

Jizi, 2017; Pucheta-Martínez & Gallego-Alvarez, 2019), thus, positively
influencing CSR performance. In line with theoretical discussions and
prior empirical findings, we suggest the following hypothesis:
H3b. Board independence is positively associated with CSR
performance.
2.4 | Board size
There are two main opposing views regarding the link between board
size and firm performance. One view suggests that board size positively
influences firm performance, since larger boards provide the diversity
needed for using corporate resources effectively and maintaining con-
tacts (Haniffa & Hudaib, 2006). Another view argues that board size is
negatively associated with firm performance because in a small board,
the performance of each director can more easily be monitored and
decisions can be made quickly (Haniffa & Hudaib, 2006). Furthermore,
in terms of group dynamics, small boards are more effective and effi-
cient at monitoring and supervising managers than large boards

(Pucheta-Martínez & Gallego-Alvarez, 2019). Accordingly, there are
contradictory findings regarding the link between board size and firm
performance, including negative (Guest, 2009; Yermack, 1996), positive
(Coles et al., 2008; Karim et al., 2020) as well as insignificant associa-
tions (Prabowo & Simpson, 2011). In line with the view suggesting a
negative relation between board size and firm performance, we pro-
pose the following hypothesis:
H4a. Board size is negatively associated with financial performance.
Since a large number of members on a board of directors leads to
slower communication and a less efficient decision-making process
(Kaymak & Bektas, 2017), damaging the board's ability to fulfill its
duties (Said et al., 2009), board size is expected to be negatively asso-
ciated with CSR performance. Consistent with the view proposing a
negative relation between board size and CSR performance, we sug-
gest the following hypothesis:
H4b. Board size is negatively associated with CSR performance.
2.5 | CEO duality
CEO duality occurs when the positions of the board chair and the chief
executive officer are jointly held by the same person (Mallin &
Michelon, 2011). Roberts et al. (2005) argued that CEO duality con-
strains board independence, resulting in a weak checks-and-balances
system. Indeed, CEO duality gives too much power to one individual
who may be likely to pursue personal goals that could be detrimental to
6 UYAR ET AL.

the firm value (Haniffa & Hudaib, 2006). In that sense, the separation of
the board chair and CEO roles can improve management's effective-
ness, reduce agency costs, and improve firm performance (Naciti,
2019). Robbins and Taylor (2014) stated that separating the board chair
and CEO roles enhances the ability of organizations to fulfill their fidu-
ciary and moral responsibilities in the healthcare sector. Consistent with
theoretical arguments, prior research empirically documented that CEO
duality is negatively associated with financial results (Haniffa &
Hudaib, 2006). Thus, we posit the following hypothesis:
H5a. CEO duality is negatively associated with financial
performance.
CEO entrenchment, thus may lead to opportunistic behavior that
exacerbates agency conflicts while reducing shareholder wealth
(Jensen & Meckling, 1976). The monitoring effectiveness of female
directors on a board could be undermined by the presence of CEO
duality (Benjamin & Biswas, 2019) since their role in providing a better
financial outcome could be weakened by the existence of CEO dual-
ity. Bliss (2011) documented that a positive association between
board independence and audit quality is detected only in firms with-
out CEO duality, suggesting that CEO duality constrains board inde-
pendence. Accordingly, we expect that the association between board
gender diversity and firm financial performance is moderated by CEO
duality. Thus, we develop the following hypotheses:

Companies with CEO duality assign greater power to a person
enabling him to make decisions that may not consider the interests of
external stakeholders, resulting in reluctance to undertake community
or social activities (Khan et al., 2013). Tibiletti et al. (2020) stated that
as more information can strengthen external control, the CEO who
also holds the chairperson role could be less likely to produce a CSR
report. Accordingly, empirical research suggests a negative association
between CEO duality and CSR performance (Mallin
Michelon, 2011; Naciti, 2019). In line with theoretical arguments and
prior empirical findings, we assume that firms with CEO duality are
less likely to develop CSR strategies and be involved in CSR practice.
Thus, we propose the following hypothesis:
H5b. CEO duality is negatively associated with CSR performance.
2.6 | CSR committee, board gender diversity, and
CSR performance
CSR committees generally perform functions related to the adoption
of CSR strategies, policies, procedures, and trends, and manage and
review relations with stakeholders (Fuente et al., 2017). Therefore,
the establishment of a CSR committee as part of the corporate board
can lead to a significant increase in CSR performance (Velte, 2016). In
this context, the existence of a CSR committee may enhance the role
of board gender composition in improving CSR performance. There-
fore, we expect that the existence of a CSR committee moderates the
association between board gender diversity and CSR performance.
Thus, we propose the following hypothesis:
H7a. CEO duality moderates the association between board gender
diversity and financial performance.
Female directors are valuable resources in a firm because they
possess the potential to promote CSR practice and disclosure (Khan
et al., 2019). This implies that boards with more female directors are
likely to influence firms so that they consider social and environmental
& engagement and are involved in CSR practice. The decisions of inside
directors can be impacted by a CEO who also holds the position of
board chair because they do not wish to oppose a powerful CEO

(Pucheta-Martínez & Gallego-Alvarez, 2019). On the one hand, if the
overpowered CEO considers societal and environmental issues and
encourages CSR practice, inside directors, including female directors,
may take a more active role in promoting responsible actions. On the
other hand, if the board chair-CEO neglects the societal and environ-
mental interests of the stakeholders, female directors may want to
avoid confrontation with the board chair-CEO and be less likely to
encourage CSR involvement. In this context, we suggest that CEO
duality can have a moderating impact upon the association between
female directors and CSR performance by strengthening or weakening
their influence on CSR. Thus, we posit the following hypothesis:
H7b. CEO duality moderates the association between board gender
diversity and CSR performance.
3 | RESEARCH METHODOLOGY
3.1 | Sample and data

H6. CSR committee moderates the association between board gen-
der diversity and CSR performance.
2.7 | CEO duality, board gender diversity and
financial and CSR performance
Female directors on a board contribute to the firm's societal con-
science and improve collective performance as they enhance the wel-
fare of the shareholders (Arayssi et al., 2016). CEO duality facilitates
The initial sample of the study consisted of 2644 firm-year records
obtained from the healthcare sector included in the Thomson Reuters
Eikon (hereafter Thomson) between 2011 and 2018. Thomson pro-
vides content regarding companies, including fundamentals and ESG,
among others. Thomson's company fundamentals have a coverage of
more than 88,000 companies trading in 120+ countries. The company
fundamentals data goes back 30+ years, thus providing a long history
of the financial health of companies which is comprised of data filed
in financial statements. ESG data's content, on the other hand, is rela-
tively limited, yet it includes over 7000+ companies globally. The ESG
UYAR ET AL.
data covers 70% of the global market capitalization from 76 countries
(Refinitiv, 2020a). Thomson groups companies into 10 economic sec-
tors, 28 business sectors, and 54 industry groups. Healthcare is one of
the economic sectors, including the healthcare services and equip-
ment, pharmaceuticals, and medical research business sectors, and
further classified into industry groups including the healthcare equip-
ment and supplies, healthcare providers and services, pharmaceuticals,
and the biotechnology and medical research (Refinitiv, 2020b).
Before testing the proposed models, as a critically important step
in the methodology, an initial data screening process such as missing
data analysis, outlier detection, winsorization, and multiple imputation
were performed. According to the initial data screening with descrip-
tive statistics, Leverage and Return on Assets (ROA) had heavy skew-
ness, with a large variability around the mean value, due to the
extreme values. Therefore, Leverage and ROA were subjected to the
winsorization process by winsorizing the lower and the top tails at 1%
by replacing the extreme values with winsorized or trimmed values at
both ends. The winsorization step alleviates the heavy skewness in
the distribution of these variables. For the next step, the sample was
subjected to the multivariate outlier detection process with the Mini-
mum Covariance Determinant (MCD) estimator, which robustifies the
Mahalanobis distance (Verardi & Dehon, 2010). As a result of MCD,
six firm-year records were eliminated from the sample before further
analysis with hypothesis testing. Thus, the final sample size left for
further analysis was 2638 firm-year records.
The next step of the data preprocessing included the missing
data analysis and imputation processes. Based upon the descriptive
statistics of the missing data analysis, ROA had 2 (0.08%), board gen-
der diversity (Bgdiveristy) had 31 (1.17%), board independence
(Brdindep) had 1 (0.04%), board size (Brdsize) had 1 (0.04%), free-
float percentage (Ffloatperc) had 21 (0.79%), Leverage had
2 (0.08%), and TobinQ had 549 (20.76%) firm-year missing records
(all of the variables are defined in the following sub-section). These
variables with the indicated number of missing values and the
corresponding percentages in the bracket were subjected to multiple
imputation. The Expectation–Maximization (EM) methodology is
employed to investigate the missing values by determining the miss-
ing data pattern, estimating the means, standard deviations, covari-
ance, and correlations. The Little's MCAR test is used whether the
multiple imputation is a required step or not. The EM analysis with
Little's Chi-Square test (Little, 1988) is employed to test if the miss-
ing values are missing completely at random (MCAR) where the null
hypothesis is that the data are missing completely at random.
According to the EM analysis with Little's MCAR test, the null
hypothesis was rejected in favor of the alternative hypothesis
(Little's MCAR Chi-Square Test: 670.91; p value: 0.001). Accord-
ingly, the results revealed that the data were not missing completely
at random, thus it was not safe to impute the missing values singly
and that it was risky to eliminate the missing records listwise. Finally,
the multiple imputation approach with the Markov chain Monte
Carlo (MCMC) was performed, using linear regression as the model
type for scale variables to generate possible values for the missing
values, and then creating multiple complete data sets.
7
Following the data preprocessing, the final sample was 2638, of
which 6.25% of firm-year records were in 2011, 6.56% in 2012,
6.97% in 2013, 8.00% in 2014, 11.49% in 2015, 16.76% in 2016,
20.39% in 2017, and 23.58% in 2018. The sample used in this study is
an unbalanced panel data.
3.2 | Variables
The dataset includes five sets of variables: financial performance data,
CSR data, board structure data, ownership structure data, and finan-
cial characteristics data. Financial performance is measured by two
commonly used proxies, namely ROA and TobinQ as accounting-
based and market-based financial performance indicators, respectively
(Shahbaz et al., 2020). As CSR data, CSRcom indicates the existence
or not of a CSR committee in a firm, which is a binary variable; four
proxies are used to capture different facets of CSR performance,
namely composite ESGscore and its three pillars (ENVscore,
SOCscore, and GOVscore) (Escrig-Olmedo et al., 2019; Uyar
et al., 2020; Wang et al., 2018). For the board structure data, the
study used four proxies, including Bgdiveristy, Brdindep, Brdsize, and
CEOduality (Liao et al., 2018; Uyar et al., 2020). Ffloatperc, as a proxy
of ownership structure, indicates the percentage of shares outstand-
ing (Uyar et al., 2020). Finally, Firmsize and Leverage were used as
control variables for the financial characteristics of the firms (Fuente
et al., 2017; Uyar et al., 2020). Table 1 lists all the variables, defini-
tions, and sources.
3.3 | Empirical methodology
The variables include a time-variant relationship between the inde-
pendent variables and the proposed dependent variables. As well, the
format of the sample was based upon the firm-year longitudinal struc-
ture. Due to the sample's structure, as well as the time-variant associ-
ation between the dependent and the independent test variables,
panel data regression analysis as the most appropriate analysis tool
was selected for testing the proposed models. Panel data regression
analysis can eliminate the risk of multicollinearity and estimation bias
(Baltagi, 2001). Various tests such as F-test, Hausman's test, and
Breusch and Pagan Lagrange multiplier test (LM) were performed to
identify fixed-effects, random-effects, and pooled ordinary regression
analysis. First, the F-test results showed that the fixed-effects panel
regression analysis should be chosen compared to ordinary pooled
regression; second, the LM test results showed that random-effects
panel data regression analysis should be chosen rather than the ordi-
nary regression analysis; finally, the Hausman's (Hausman, 1978) test
indicated that the fixed-effects panel data regression analysis should
be chosen, compared to the random-effects panel data regression
analysis. Therefore, the results of the analysis were based upon the
fixed-effects panel data regression analysis. The formulation of the
research models is presented with the given functional relationship in
Equation (1).
8 UYAR ET AL.

TABLE 1 List of variables and their definitions TABLE 2 Descriptive statistics

Variable Description Source Variable Obs Mean SD Min Max

TobinQ Firm Value: Market value of Authors' TobinQ 2638 2.50 3.78 0.15 155.23
equity plus debt divided by calculation ROA 2638 −3.99 21.94 −63.74 29.47
total assets
ESGscore 2638 50.08 16.70 7.89 95.02
ROA Return on assets; earnings after Authors'
tax divided by total assets calculation ENVscore 2638 50.35 19.60 10.89 99.50

CSRcom Takes 1 if CSR committee exists, Thomson Reuters SOCscore 2638 50.46 21.78 4.55 98.54
otherwise 0 Eikon GOVscore 2638 49.33 20.97 1.02 96.31
ESGscore Composite environmental, social, Thomson Reuters CSRcom 2638 0.32 0.46 0.00 1.00
and corporate governance Eikon Bgdiveristy 2638 15.99 11.69 0.00 60.00
score ranging between 0 and
100 Brdsize 2638 9.01 2.66 1.00 23.00

ENVscore Environmental score ranging Thomson Reuters Brdindep 2638 76.66 16.38 0.00 100.00
between 0 and 100 Eikon CEOduality 2638 0.40 0.49 0.00 1.00
SOCscore Social score ranging between 0 Thomson Reuters Ffloatperc 2638 83.66 20.37 1.39 100.00
and 100 Eikon Firmsize 2638 21.22 1.96 13.43 26.00
GOVscore Governance score ranging Thomson Reuters Leverage 2638 45.64 24.82 3.48 112.42
between 0 and 100 Eikon
Bgdiveristy Percentage of the number of Thomson Reuters
female directors to the total Eikon
number of directors
advantages; for example, utilizing the fixed-effects panel analysis alle-
Brdindep Percentage of the number of Thomson Reuters
viates the risk of omitted variable bias by estimating the amount of
non-executive directors to the Eikon
changes in firms across the years (Wooldridge, 2010). Thus, fixed-
total number of directors
effects regression analysis, with the year being a dummy variable, can
Brdsize Number of directors on a board Thomson Reuters
Eikon alleviate the risk of omitted variable bias.

CEOduality Takes 1 if the CEO and Thomson Reuters

chairperson position is held by Eikon
the same person, otherwise 0 4 | FI ND I NG S
Ffloatperc Free Float as a percentage of Thomson Reuters
shares outstanding Eikon 4.1 | Descriptive statistics
Firmsize The natural logarithm of total Authors'
assets calculation
The summary statistics of the variables are provided in Table 2. The
Leverage The ratio of total debt to total Authors' results of the descriptive statistics show that the mean value of TobinQ
assets calculation
is 2.50 ± 3.78 and ROA is −3.99 ± 21.94. Hence, it appears that the
healthcare sector during the analysis period is not profitable on aver-

yit = α + βXit + ϑi + ϵit :
In equation one, the “yit” shows the dependent variables: TobinQ,
ROA, ESGscore, ENVscore, SOCscore, and GOVscore. The term “Xit”
shows the independent test variables as well as the control variables;
the independent test variables are CSRcom, Bgdiveristy, Brdsize, and
Brdindep while the control variables are CEOduality, Ffloatperc,
Firmsize, Leverage, and ROA. The variable “ROA” is not used as a con-
trol variable when it is used as a dependent variable in the aforemen-
tioned represented equation of the proposed models. Furthermore,
the index “i” indicated the firm as the panel variable, and the index “t”
indicated the year as the time variable. Moreover, “ϑi + ϵit” indicated
that the error term with “ϑi” was the firm-specific error term while
“ϵit” was the regular error term. In each analysis, the research models
were subject to robust standard errors to eliminate the hetero-
skedasticity in the idiosyncratic error term, “ϵit” (Wooldridge, 2013).
Fixed-effects panel data regression analysis allows us some
ð1Þ age. The composite, as well as individual CSR performance metrics, is
converging to approximately 50 as follows; ESGscore is 50.08 ± 16.70,
ENVscore is 50.35 ± 19.60, SOCscore is 50.46 ± 21.78, GOVscore is
49.33 ± 20.97. Moreover, the board characteristics show that boards
of healthcare firms include 15.99% female directors, 9.01 directors on
boards, and 76.66% independent directors. As well, firms are moder-
ately leveraged, as the ratio is 45.64%, and the majority of shares
(83.66%) are traded on the stock exchange.
4.2 | Correlation analysis
The bivariate correlations between each pair of the included variables
are shown in Table 3. To investigate the bivariate correlations, Spe-
arman's correlation analysis as a non-parametric tool was utilized,
since CSRcom and CEOduality are categorical variables. The results
indicated that Bgdiversity had a significant positive correlation with
TobinQ while Brdsize had a significant negative correlation. Hence,
UYAR ET AL. 9

the more gender diverse the board, the higher the market value, while
V14 with a larger board the market value is smaller. Regarding ROA,

1
Bgdiversity and Brdsize have a significant positive association with

0.3682a
ROA. Thus, the more a board is gender diverse, profitability is higher,
V13

with the same consequence in larger boards. Moreover, the results

1
revealed that CSRcom, Bgdiveristy, Brdsize, and Brdindep had a signif-
icant positive association with ESGscore, ENVscore, SOCscore, and

0.2444a
0.2241a
V12

GOVscore. Hence, larger boards, boards with CSR committees, boards

1
with more female directors, and with a greater number of non-
executive directors all had a greater CSR performance.

0.0754a
a

0.1225a
0.2139
Furthermore, the multicollinearity issue was addressed by investi-
V11

1
gating the Variance Inflation Factors (VIFs) of the independent vari-
ables of the proposed models. Accordingly, the values of VIFs of the
0.1645a
0.3214a
a

0.2528a
0.2437
proposed models ranged between 1.07 and 2.63, which are signifi-
V10

cantly lower than the cut-off value of 10 (Hair et al., 2010).

1
0.2572a
a

0.1096a
a

0.2804a
0.1577

0.5946

4.3 | Empirical results

V9

The results of the baseline analysis are presented in Table 4. The pro-
0.2289a
0.2407a

0.1858a
a

0.1878a
−0.0143

0.2112

posed models are numbered for each separate dependent variable in

V8

the columns of Table 4. The results indicate that CSRcom (p < 0.01)
and Bgdiversity (p < 0.01) had a significant positive association with
0.0961a
a

0.1055a
a

0.0745a
a

0.1802a
0.3603

0.0559

0.5331

ESGscore, ENVscore, SOCscore, and GOVscore in Models 3, 4, 5, and

V7

6; hence, H1 and H2b are accepted for all dimensions of CSR perfor-
1

mance. The results highlight the prominent roles of CSR committees

0.3907a
0.2795a
a

0.2622a
a

0.2459a
a

0.1443a

and also female directors in enhancing CSR performance in all three

0.2582

−0.0491

0.4390

dimensions, namely environmental, social, and governance.

V6

In addition, while Bgdiversity has a significant positive association

with TobinQ (p < 0.01), Brdsize and Brdindep did not have a signifi-
0.3550a
a

0.2026a
a

0.2694a
a

0.2564a
a

0.2418a
0.4847

0.3129

0.1123

0.4977

cant association with TobinQ in Model 1. Hence, it appears that while

V5

the shareholders in the healthcare sector are pleased with the exis-
1

tence of women directors in board mechanisms, they are not at all sat-
0.6233a
0.3318a
a

0.2000a
a

0.1904a
a

0.1308a
a

0.1976a

isfied with large boards and/or independent directors. Furthermore, in

0.5025

0.3429

0.0935

0.5029

Model 2 where the dependent variable was ROA, the coefficients of

V4

Bgdiversity (p < 0.10) and Brdsize (p < 0.05) were significantly nega-
tive, while Brdindep was not significant. This means that although
0.8140a
a

0.6800a
a

0.2853a
a

0.3013a
a

0.2533a
a

0.2491a
0.8524

0.5688

0.3820

0.0754

0.5930

board gender diversity (weak significance) and large board size

V3

weakens profitability, independent directors have a neutral effect

upon it. Thus, regarding the association between board structure and
0.2382a
0.2310a
a

0.1822a
a

0.0987a
a

a
Spearman's correlation coefficients

0.1644

0.3329

0.2436
0.0338
0.1001
−0.0099
0.4170
−0.0132

financial performance, while H2a and H4a are supported, H3a is not.
Moreover, while Brdindep (p < 0.01) had a significant positive associ-
V2

ation solely with ESGscore and GOVscore in Models 3 and 6, Brdsize

(p < 0.01) had a significant negative association with ESGscore as well as
0.3104a

0.0769a
a

−0.1595a
−0.0024
−0.0275
0.0073
0.0042
−0.0022

−0.0402

0.0423

−0.1864
0.002

0.008

SOCscore and GOVscore in Models 3, 5, and 6. These findings lend sup-

V1
1

port to H3b and H4b. The results imply that independent directors foster
CSR engagement in healthcare firms, but that large board size impairs
CEOduality
Bgdiveristy
GOVscore

it. Finally, while CEOduality had no significant association with financial

Ffloatperc
ENVscore
SOCscore
ESGscore
Variables

Brdindep

Leverage
CSRcom

Firmsize
TobinQ

Brdsize

performance, it did have a significant negative association with ESGscore

ROA

(p < 0.01), SOCscore (p < 0.01), and GOVscore (p < 0.01). These findings
TABLE 3

resulted in the rejection of H5a while H5b was accepted. These results
p < 0.05.
V10
V11
V12
V13
V14

suggest that not only do powerful CEOs not promote firm financial per-
V1
V2
V3
V4
V5
V6
V7
V8
V9

formance, they also destroy a firm's CSR commitment.

a
10 UYAR ET AL.

TABLE 4 Panel-data regression analysis with fixed-effects

(1) (2) (3) (4) (5) (6)

Independent variables TobinQ ROA ESGscore ENVscore SOCscore GOVscore
CSRcom 8.50c 8.16c 9.45c 7.79c
(12.49) (9.12) (9.39) (7.73)
Bgdiveristy 0.022 c
−0.054 a
0.33 c
0.26 c
0.35 c
0.37c
(5.00) (−1.78) (14.37) (8.77) (10.47) (10.99)
Brdsize 0.019 −0.39 b
−0.66 c
−0.28 −0.58 c
−1.19c
(0.67) (−2.00) (−4.44) (−1.44) (−2.62) (−5.37)
Brdindep −0.0057 −0.0079 0.11 c
−0.032 0.017 0.36c
(−1.47) (−0.29) (5.17) (−1.20) (0.56) (12.00)
CEOduality 0.086 0.30 −2.85 c
−1.06 −2.48 c
−5.28c
(0.77) (0.38) (−4.81) (−1.36) (−2.83) (−6.03)
c a
Ffloatperc 0.012 0.020 0.040 0.039 0.020 0.063a
(2.67) (0.62) (1.66) (1.23) (0.58) (1.79)
Firmsize −0.86 c
5.45 c
6.15 c
6.39 c
7.34 c
4.51c
(−10.76) (9.92) (14.39) (11.38) (11.62) (7.13)
Leverage −0.0022 −0.20 c
0.020 0.020 0.034 a
0.0052
(−0.91) (−12.59) (1.63) (1.19) (1.85) (0.28)
ROA 0.012c −0.046c −0.023 −0.054b −0.064b
(3.68) (−2.74) (−1.04) (−2.14) (−2.55)
Constant 19.8 c
−107.2 c
−93.9 c
−90.9 c
−112.5 c
−75.7c
(11.66) (−9.16) (−10.37) (−7.64) (−8.41) (−5.65)
Firm-Year Effect Yes Yes Yes Yes Yes Yes
N 2638 2638 2638 2638 2638 2638
2
R 0.06 0.13 0.30 0.17 0.19 0.21
F-stat 16.33c 41.48c 95.42c 45.84c 52.91c 58.45c

Note: t statistics in parentheses.

a
p < 0.10.
b
p < 0.05.
c
p < 0.01.

4.4 | Moderation analysis
First, the moderation role of CSRcom upon the relationship
between the independent test variables (Bgdiveristy, Brdsize,
Brdindep) with CSR performance was tested by using fixed-effects
panel data regression analysis. In Table 5, the moderating variable,
CSRcom was a binary variable where one (1) represented the
existence of the CSR committee while zero (0) represented other-
wise. The results indicated that Bgdiversity had a significant
positive association with ESGscore, ENVscore, SOCscore, and
GOVscore to the existence of CSRcom as well as to the non-
existence of CSRcom. Hence, the CSR committee did not moderate
the role of female directors in fostering a firm's CSR performance,
which rejects H6. As a result, women encourage the CSR engage-
ment of firms, regardless whether CSR committees exist or do not.
Furthermore, Brdsize had a significant negative relationship with
ESGscore, both for the existence as well as the non-existence of
CSRcom. It had a significant negative association with ENVscore and
SOCscore for the non-existence of CSRcom, but at the same time, it
had a significant negative relationship with GOVscore for the exis-
tence of CSRcom. Furthermore, Brdindep had a significant positive
association with ESGscore and GOVscore for both the existence of
CSRcom and the non-existence of CSRcom. Finally, it had a significant
positive association with SOCscore for the non-existence of CSRcom.
Thus, CSR committees do not play a substantial positive moderating
role between board size, independent directors and CSR performance.
Second, the moderating role of CEOduality upon the relationship
between the independent variables, firm financial and CSR perfor-
mance was investigated by using fixed-effects panel data regression
analysis. In Table 6, the moderating variable CEOduality is a dichoto-
mous variable where one (1) represents whether the CEO and chair-
person positions are held by the same person, and zero (0) represents
otherwise. Regarding the TobinQ as the dependent variable, the coef-
ficients of Bgdiversity were significantly positive, regardless of
whether CEOduality existed or not and the coefficient of Brdindep
was a significant negative for the non-existence of CEOduality. In
UYAR ET AL. 11

TABLE 5 Moderating role of CSRcom with fixed-effects panel data regression analysis

(1) (2) (3) (4) (5) (6) (7) (8)

Independent ESGscore ESGscore ENVscore ENVscore SOCscore SOCscore GOVscore GOVscore
Variables CSRcom:1 CSRcom:0 CSRcom:1 CSRcom:0 CSRcom:1 CSRcom:0 CSRcom:1 CSRcom:0
Bgdiveristy 0.35c 0.28c 0.27c 0.21 0.35c 0.33c 0.42c 0.31c
(10.11) (9.47) (6.23) (5.16) (6.71) (7.64) (7.70) (7.02)
Brdsize −0.56c −0.80c 0.024 −0.56b 0.068 −1.36c −1.94c −0.41
(−2.73) (−3.91) (0.09) (−2.04) (0.22) (−4.56) (−5.88) (−1.36)
Brdindep 0.083b 0.15c 0.0050 −0.011 −0.053 0.11c 0.33c 0.38c
(2.56) (5.95) (0.12) (−0.31) (−1.07) (2.94) (6.28) (10.20)
CEOduality −2.63c −1.79b −1.36 −0.16 −2.20a −1.66 −4.54c −3.76c
(−3.24) (−2.20) (−1.31) (−0.14) (−1.79) (−1.40) (−3.47) (−3.15)
Ffloatperc 0.058 0.034 0.018 0.030 0.016 0.060 0.15c 0.0087
(1.21) (1.20) (0.29) (0.79) (0.21) (1.43) (1.98) (0.21)
Firmsize 7.68c 5.99c 9.81c 5.72c 11.2c 6.83c 1.21 5.31c
(8.25) (12.28) (8.21) (8.70) (7.94) (9.58) (0.80) (7.43)
Leverage −0.028 0.028+ 0.039 0.014 −0.049 0.040b −0.078 0.029
(−0.88) (2.08) (0.97) (0.80) (−1.02) (2.03) (−1.54) (1.47)
ROA 0.046 −0.049c 0.092 −0.020 0.14 −0.061b −0.11 −0.069c
(0.82) (−2.84) (1.27) (−0.87) (1.61) (−2.38) (−1.23) (−2.70)
Constant −119.4c −92.4c −167.0c −74.7c −190.1c −105.7c 16.0 −96.6c
(−5.77) (−9.18) (−6.29) (−5.50) (−6.05) (−7.18) (0.48) (−6.55)
Firm-Year Effect Yes Yes Yes Yes Yes Yes Yes Yes
N 833 1805 833 1805 833 1805 833 1805
R2 0.28 0.22 0.20 0.10 0.20 0.15 0.19 0.17
F-stat 32.60c 45.60c 20.09c 17.10c 20.61c 27.26c 19.24c 32.72c

Note: t statistics in parentheses.

a
p < 0.10.
b
p < 0.05.
c
p < 0.01.

addition, Brdsize had a significant negative association with ROA for
the non-existence of CEOduality, while Bgdiversity and Brdindep did
not have a significant association with ROA for both the existence or
non-existence of CEOduality. While female directors enhance firm
value, they do not affect profitability, regardless whether CEOduality
exists or not. Larger and more independent boards influence profit-
ability and firm value negatively (respectively) when the positions of
CEO and chairperson are held by separate persons.
On the other hand, for CSR performance proxied by the compos-
ite ESG score as well as its three pillars, female directors are always
influential, regardless of whether CEOduality exists or not. Moreover,
Brdsize was negative and significant for composite ESG score as well
as GOVscore and was not significant for ENVscore for both sub-sam-
ples. It was significant and negative for SOCscore, in cases where
there is no CEOduality. Finally, Brdindep was positive and significant
for the composite ESG score as well as the GOVscore, and was not
significant for ENVscore and SOCscore in both sub-samples. Hence,
these results suggested that CEOduality did not moderate the rela-
tionship between board characteristics and CSR performance. While
female directors strengthened the CSR posture of the firms in all
dimensions, independent directors fortified only the governance
dimension, implying that conversely, larger boards weaken it.
Therefore, the results did not lend support to the acceptance of
H7a and H7b concerning the moderating role of CEOduality between
board gender diversity, financial and CSR performance respectively.
The results suggested that powerful CEOs do not exert a considerable
influence on the monitoring role of female directors; but that women's
influence exists in generating value for shareholders and inducing
greater CSR engagement, regardless of the existence of CEO duality or
not. Table 7 summarizes the acceptance or rejection of all hypotheses.
4.5 | Robustness check
To assess the robustness of the baseline analysis results, Instrumental
Variable (IV) Regression Analysis with two-stage least square-2SLS
(Wooldridge, 2013) was performed. It is a widely used approach with
which to deal with the endogeneity which occurs when some of the
 12

TABLE 6 Moderating effect of CEOduality with fixed-effects panel data regression analysis

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
Independent TobinQ_1 TobinQ_1 ROA_1 ROA_1 ESGscore ESGscore ENVscore ENVscore SOCscore SOCscore GOVscore GOVscore
Variables CEO:1 CEO:0 CEO:1 CEO:0 CEO:1 CEO:0 CEO:1 CEO:0 CEO:1 CEO:0 CEO:1 CEO:0
Bgdiveristy 0.021c 0.017c −0.067 −0.010 0.42c 0.28c 0.34c 0.19c 0.46c 0.31c 0.46c 0.35c
(2.71) (3.07) (−1.30) (−0.25) (9.14) (10.26) (5.64) (5.58) (6.93) (7.53) (6.91) (8.43)
Brdsize 0.016 0.0037 −0.070 −0.59b −0.74c −0.38b 0.013 −0.18 −0.16 −0.49a −2.25c −0.48a
(0.37) (0.10) (−0.24) (−2.07) (−2.85) (−1.98) (0.04) (−0.75) (−0.43) (−1.68) (−6.00) (−1.65)
Brdindep 0.00027 −0.011b 0.040 −0.020 0.11b 0.12c −0.045 −0.032 −0.065 0.043 0.48c 0.39c
(0.04) (−2.37) (0.79) (−0.57) (2.36) (5.07) (−0.74) (−1.07) (−1.00) (1.18) (7.27) (10.64)
Ffloatperc 0.0071 0.017c 0.054 −0.034 0.13c 0.00068 0.17c −0.0061 0.18c −0.037 0.044 0.052
(0.90) (2.70) (1.02) (−0.73) (2.85) (0.02) (2.68) (−0.16) (2.65) (−0.79) (0.65) (1.11)
Firmsize −0.55c −0.96c 2.38c 7.71c 9.51c 4.98c 10.5c 4.15c 11.0c 6.71c 6.69c 3.89c
(−4.16) (−8.81) (2.69) (10.03) (12.03) (9.10) (9.90) (6.13) (9.70) (8.13) (5.85) (4.72)
Leverage −0.0018 −0.0067b −0.18c −0.22c −0.013 0.024 −0.0016 0.015 −0.0050 0.038 −0.037 0.016
(−0.47) (−2.15) (−7.22) (−10.18) (−0.59) (1.52) (−0.05) (0.78) (−0.15) (1.63) (−1.11) (0.69)
ROA 0.0026 0.013c −0.050 −0.046b −0.055 −0.0096 −0.032 −0.081c −0.065 −0.045
(0.49) (3.17) (−1.57) (−2.26) (−1.30) (−0.38) (−0.70) (−2.65) (−1.40) (−1.48)
Constant 13.3c 22.1c −50.3c −147.5c −173.9c −66.6c −191.1c −37.2c −201.5c −94.6c −122.6c −66.9c
(4.61) (9.86) (−2.58) (−9.26) (−10.01) (−5.92) (−8.23) (−2.67) (−8.08) (−5.57) (−4.88) (−3.94)
Firm-Year effect Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
N 1059 1579 1059 1579 1059 1579 1059 1579 1059 1579 1059 1579
R2 0.03 0.08 0.07 0.18 0.32 0.19 0.21 0.07 0.22 0.12 0.20 0.17
b c c c c c c c c c c
F-stat. 2.95 13.63 10.33 41.03 52.09 36.92 29.19 12.72 32.15 21.82 27.57 32.47c

Note: t statistics in parentheses.

a
p < 0.10.
b
p < 0.05.
c
p < 0.01.
UYAR ET AL.
UYAR ET AL. 13

TABLE 7 Acceptance or rejection of the hypotheses
H1: CSR committee is positively associated with CSR
performance.
H2a: Board gender diversity is positively associated with
financial performance.
H2b: Board gender diversity is positively associated with
CSR performance.
H3a: Board independence is positively associated with
financial performance.
H3b: Board independence is positively associated with
CSR performance.
H4a: Board size is negatively associated with financial
performance.
H4b: Board size is negatively associated with CSR
performance.
H5a: CEO duality is negatively associated with financial
performance.
female directors and ROA as well as independent directors and
Accepted TobinQ, while they were not in the baseline analysis.
Accepted
5 | DI SCU SSION AND CO NCLUSIO N
Accepted
Although an increasing number of studies draw attention to the con-
Rejected figuration of board structures of firms, the healthcare sector remains
largely untouched in this respect. Moreover, evidence concerning
Accepted the interaction of a CSR committee and CEO duality with board
structure is scarce. As the healthcare sector represents a significant
Accepted
portion of the economy of a country and touches human lives
directly, examination of this topic deserves attention for economic
Accepted
as well as the environmental and social sustainability of society.
Thus, this study addressed this gap by examining the mechanics of
Rejected
how the interplays among boards of directors, CEO duality and CSR

H5b: CEO duality is negatively associated with CSR Accepted
performance.
H6: CSR committee moderates between board gender Rejected
diversity and CSR performance.
H7a: CEO duality moderates between board gender Rejected
diversity and financial performance.
H7b: CEO duality moderates between board gender Rejected
diversity and CSR performance.
independent variables are correlated with the unobserved error term
in the model, as well as to mitigate the inconsistency in estimations of
the parameters caused by endogeneity issues in accounting research
(Larcker & Rusticus, 2010). It is used to eliminate the correlations
between the error term and the independent variables. The endo-
geneity as well as the omitted variable bias were addressed by using
the instrumental variable with 2SLS regression (Cui et al., 2018; Sun &
Yu, 2015; Wooldridge, 2013).
One firm-year lagged of the independent test variables were used
as the instruments which were likely to be correlated with the endog-
enous variables and they were not correlated with the error term
(Godos-Díez et al., 2018; Ngare et al., 2014; Wooldridge, 2013). The
results of the instrumental variable regression analysis with 2SLS is
presented in Table 8. The results showed that CSRcom had a signifi-
cant positive association with ESGscore (p < 0.01), ENVscore
(p < 0.01), SOCscore (p < 0.01), and GOVscore (p < 0.01). In addition,
Bgdiversity had a significant positive relationship with TobinQ
(p < 0.01), ROA (p < 0.01), ESGscore (p < 0.01), ENVscore (p < 0.01),
SOCscore (p < 0.01), and GOVscore (p < 0.01). Furthermore, Brdsize
had a significant negative association with ROA (p < 0.01), ESGscore
(p < 0.01), and GOVscore (p < 0.01) while it did not have a significant
association with TobinQ, ENVscore, and SOCscore. Finally, the results
revealed that Brdindep had a significant positive relationship with
TobinQ (p < 0.05), ESGscore (p < 0.01), SOCscore (p < 0.01), and
GOVscore (p < 0.05). The results of the IV regression analysis were
largely consistent with the initial baseline analysis. However, the
Robustness test produced a positive significant association between
committee influence firm financial and CSR performance. In doing
so, the study aims to provide implications for better configuration of
board structures to improve the performance of the healthcare
sector.
The consequences drawn from the analyses follow. While CSR
committees and female directors are strong drivers of CSR perfor-
mance in all dimensions, female directors are predictors of market per-
formance (firm value) but not accounting performance (profitability)
for the two financial performance indicators. Nevertheless, the
robustness test confirmed their positive role in improving profitability
as well. Hence, the results confirmed prior studies verifying the posi-
tive role of female directors (Cullinan et al., 2019; Hussain
et al., 2018; Shahbaz et al., 2020) and CSR committees (Amran

et al., 2014; Datt et al., 2018; Gallego-Alvarez and Pucheta-Martínez,
2020) on the CSR engagement of firms. The influence of board diver-
sity on financial performance also confirms the prior studies proving
that female directors contribute to financial performance (Liu
et al., 2014; Terjesen et al., 2016). Moreover, larger boards are detri-
mental to firm financial and CSR performance which confirms the per-
spective that larger boards are inefficient (Yermack, 1996). On the
other hand, independent directors are influential in composite CSR
performance as well as the governance dimension of CSR, which is in
line with the findings in other industries such as energy (Shahbaz
et al., 2020). Thus, they do not foster financial performance as well as
the environmental and social performance of healthcare firms. This
unexpected finding casts doubt over the efficacy of those directors in
monitoring and controlling functions. These findings might spark criti-
cism over the actual independence or quality of independent directors
(Gordon, 2010; McCabe & Nowak, 2008). It is also possible that an
excessive number of non-executive directors might diminish a board's
monitoring and controlling functions (Bhagat & Black, 1999), which
suggests that there is an optimum balance between insider and out-
sider directors. Lastly, CEO duality has a negative association with all
CSR performance indicators except environmental dimension, while it
has a neutral effect on financial performance, which suggests that
overpowered CEOs are detrimental to firm financial and CSR perfor-
mance (Duru et al., 2016; Li et al., 2016). This might suggest that
14 UYAR ET AL.

TABLE 8 Instrumental variable regression analysis with 2SLS

(1) (2) (3) (4) (5) (6)

Independent variables TobinQ ROA ESGscore ENVscore SOCscore GOVscore
CSRcom 13.8c 13.2c 16.2c 11.6c
(21.77) (14.96) (17.39) (12.03)
b c c c c
Bgdiveristy 0.013 0.12 0.22 0.19 0.16 0.34c
(2.56) (2.81) (7.91) (4.82) (3.80) (7.83)
Brdsize 0.029 −0.62 c
−0.43 c
−0.040 −0.26 −1.06c
(1.17) (−3.04) (−3.13) (−0.21) (−1.28) (−5.08)
Brdindep 0.0090 b
−0.036 0.097 c
0.039 0.17 c
0.072b
(2.51) (−1.23) (4.91) (1.41) (5.99) (2.39)
CEOduality 0.27 c
−0.078 −1.06 b
0.84 0.95 −5.51c
(2.78) (−0.10) (−1.97) (1.12) (1.20) (−6.71)
Ffloatperc 0.0036 −0.14 c
0.098 c
0.023 0.14 c
0.13c
(1.45) (−6.80) (7.14) (1.21) (7.01) (6.24)
Firmsize −0.45 c
6.62c
4.10 c
4.00 c
4.26 c
4.01c
(−12.26) (25.25) (19.01) (13.34) (13.42) (12.20)
Leverage −0.0073 c
−0.14 c
−0.022 a
−0.024 0.0075 −0.055c
(−3.41) (−7.92) (−1.89) (−1.45) (0.43) (−3.07)
ROA 0.025 c
−0.074 c
−0.036 a
−0.13 c
−0.054b
(9.04) (−4.93) (−1.71) (−5.79) (−2.35)
Constant 11.0 c
−120.2 c
−55.0 c
−45.6 c
−71.1 c
−46.7c
(15.83) (−24.15) (−13.82) (−8.23) (−12.14) (−7.69)
N 2010 2010 2010 2010 2010 2010
R2 0.11 0.32 0.54 0.38 0.42 0.30
χ 2
260.55 c
954.3 c
2356.34 c
1221.99 c
1427.03 c
838.51c

Note: t statistics in parentheses.

a
p < 0.10,
b
p < 0.05,
c
p < 0.01.

overpowered CEOs could exploit firm resources for their own bene-
fits, not for the benefit of stakeholders and shareholders.
Furthermore, moderation analysis indicated that CSR committees
do not moderate the relationship between female directors and CSR
performance, since female directors are influential regardless of
whether a CSR committee exits or not. Hence, the results suggested
that female directors and CSR committees are not a replacement of
one another; they appear to have separate tasks and responsibilities
in the board structure. However, considering the regression coeffi-
cients, it is evident that female directors are more influential on CSR
performance when a CSR committee does exist. This implies the com-
plementarity of their roles. On the other hand, board size still had
either negative or neutral associations with CSR performance, based
upon the chosen individual CSR dimension. Moreover, the results con-
cerning independent directors confirm the baseline analysis results
largely; independent directors are influential in improving CSR com-
posite performance and governance performance, regardless of
whether a CSR committee exists or not. However, differing from the
baseline analysis, independent directors were found to be influential
in enhancing social performance in the absence of a CSR committee,
which implies their substitutive role in this respect.
Concerning the moderating role of CEO duality, the results reveal
that a dual CEO structure does not change the role of female directors
in firm performance. Regardless whether a dual CEO exists or not,
female directors are significant predictors of firm market performance
and CSR performance in all dimensions, although not in accounting
performance. However, considering the regression coefficients, it is
apparent that female directors are more influential in terms of firm
value and CSR performance when CEO duality exists. This is in line
with finding that women perform their monitoring and controlling
functions better when CEO duality exists, because they compensate
for weak governance (Benjamin & Biswas, 2019; Chen et al., 2017).
Board size and independence are negatively and positively associated
(respectively) with composite CSR performance as well as governance
performance, regardless whether CEO duality exists or not. This
rejects the finding that CEO duality may augment (Cabrera-Suárez &
Martín-Santana, 2015) or compromise (Bliss, 2011) the monitoring
and controlling function of independent directors. These results
UYAR ET AL.
highlight that CEO duality in the healthcare sector neither weakens
nor strengthens the monitoring and controlling roles of the board
members on behalf of the corporation.
Overall, the results suggested that while female directors contrib-
uted to firm performance, CEOs with a dual role as well as a larger
number of directors on boards harm firm performance. At the same
time, independent directors have a very limited contribution to CSR
performance and do not contribute to financial performance. Modera-
tion analysis reveals that CSR committees and female directors do not
replace one another; they are both necessary and beneficial to the
corporate structure. Although CEOs with a dual role impair a firm's
performance, they do not exert considerable influence on the moni-
toring and controlling function of other directors.
6 | IMPLICATIONS
This study suggests several practical implications for firms in the
healthcare sector. First, women on boards are essential in terms of
inciting firm financial and CSR performance which justifies the validity
of both agency and stakeholder theories. They are necessary to meet
the stakeholders' expectations for addressing environmental and
social concerns. The sector is expected to meet the demands of con-
sumers for high quality healthcare services, ethical and responsible
behavior of associated professionals, and ecological practices. With
better configuration of a board, it is possible to better alleviate envi-
ronmental concerns and address the wellbeing of society, such that
they will align operation processes with eco-friendly practices. As the
healthcare sector is labor-intensive, female directors would be critical
in terms of understanding the concerns of employees, in terms of job
security, and wellbeing. Moreover, they could be beneficial in exten-
ding the activities of the firms beyond financial concerns and assist
community development by launching initiatives for a healthier as well
as health-conscious society, and for the better integration of women
into society and work life. Beyond CSR performance, the marketplace
perceives the existence of female directors on corporate boards to be
positive; this signals that investors perceive female directors as consti-
tuting a mitigating agency when conflicts between managers and
shareholders arise. This might enable shareholders to make more
informed trading decisions in the stock markets. In summary, it
appears that women are an indispensable part of the board structure
in this sector, as their existence is welcomed by shareholders when
experiencing a higher market value. Their existence in the governance
structure is also like an insurance mechanism for stakeholders, as they
improve the CSR performance of firms in every dimension. In
response to an ongoing debate about the implications of the influence
of female directors upon a firm, the findings confirmed their value and
relevance in the healthcare sector.
Second, CSR committees in a board structure appear to monitor
and control CSR initiatives of the firms efficiently. They contribute to
the corporate decision-making and the establishment and configura-
tion of management, human resource and information systems by
directing business practices toward environmentally and socially
15
responsible practices. They can also suggest how to leverage CSR
engagement to obtain improvements in financial performance. How-
ever, as the results of moderation analysis indicate, CSR committees
do not currently play a significant role in bridging the board structure
to CSR performance. This missing link suggests that CSR committees
should undertake a more active role in mobilizing board resources to
achieve greater environmental and social performance.
Third, the results suggested that firms would do well to eliminate
combined CEO and chairperson positions, since CEO duality damages
firm performance. This could prevent managerial opportunism and
extravagance, resulting in fewer agency conflicts and costs between
managers and shareholders. Since they do not enhance financial per-
formance, they can oppose undertaking CSR initiatives which might
then expose the firms in the sector to increasing legitimacy concerns
and incompatibility sanctions imposed by the regulators. Among the
three pillars of CSR, CEO duality undermines most governance pillar,
which could trigger a negative domino effect upon the remaining
dimensions of firm financial and CSR performance, since it weakens
the governance structure and monitoring function.
Fourth, in the healthcare sector, a large board is detrimental to
both financial and CSR performance, leading to inefficiencies which
could impair communication and decision-making. Although the aver-
age size of the boards in the healthcare sector include 9.01 directors,
it rises as high as 23 directors in some circumstances. Hence, boards
should review their size and redress them to enable efficient function-
ing if they are currently damaging their firm performance. Alterna-
tively, firms with larger boards might overcome inefficiencies by
better task-sharing through establishing governance committees.
Contrary to expectations, independent directors are of limited
value to healthcare firms; this casts doubt over the qualifications of
independent directors. They improve the governance pillar of CSR,
but do nothing beyond that. The sector may need to revise their
selection, qualification and recruitment. For example, do they have
sectoral and financial expertise to support better decision-making, or
are they genuinely independent directors (without any connection to
major shareholders) being autonomous in decision-making?
The study suggests several theoretical implications as well. First,
women are tough monitors in line with agency theory as they foster
firm financial performance, hence they align with the interests of
shareholders. They are an important component of board mechanisms
in terms of addressing the needs of stakeholders, which is in accor-
dance with stakeholder theory. They improve CSR performance in all
three dimensions, namely environmental, social and governance. On
the contrary, independent directors do not alleviate agency conflicts;
neither do they address environmental and social issues, hence they
do not justify a stakeholder theory proposition. We also found that
powerful CEOs exacerbate agency conflict so that they also do not
align with the interests of stakeholders. Furthermore, in line with
resource dependence theory, the findings highlighted that CSR com-
mittees enrich the CSR commitment of firms and could foster the con-
nections of the firms with their external stakeholders. As moderation
hypotheses were rejected, we could not find empirical support for the
complexity theory. By adopting the methodological approach of the
16
study, future studies might test the validity of the complexity theory
by pursuing potential contingencies as outlined in the following
section.
In consequence, the results contribute to both financial and CSR
performance improvement in the healthcare sector. As one of the
main important functions of a board is monitoring, the findings help
healthcare firms to configure their boards to improve their monitoring
function in line with the findings. Specifically, women and CSR com-
mittees enhance firm performance, but independent directors and
powerful CEOs are inefficient and detrimental respectively in
healthcare firms.
7 | L I M I T A TI O NS A ND F U T U R E R E S E A R CH
AVENUES
The findings should be considered with the understanding that the sam-
ple only includes healthcare firms for the years between 2011 and
2018. Hence, the reader should be cautious in generalizing the results
over other sectors and out of the sample period. This limitation also
promises room for future research studies that would test the validity of
the outcomes in other major service sectors, such as tourism and hospi-
tality, transportation, and logistics, among others. Another limitation is
that the study did not consider context-specific CSR regulations across
countries, should such exist. The results suggest several future studies
such as incorporating institutional proxies, regulatory and enforcement
quality, together with healthcare size in the economy of a country.
Moreover, country-level or regional studies might enable researchers to
draw context-relevant conclusions and suggest implications accordingly.
Furthermore, examining the potential effects of other moderators
between board structure and firm performance might provide further
guidance to firms. For example, moderating the roles of ownership
structure and executive compensation could reveal interesting results.
ORCID
Ali Uyar https://orcid.org/0000-0002-4660-1798
ENDNOTES
1
See the paper of Dixit (2017) for a comprehensive literature review on
the governance of public hospitals.
2 Management, 25(3), 250–266.
ESG covers a variety of measures related to the environment
(i.e., energy use, water use, greenhouse gas emissions, and climate
change), social responsibility (i.e., gender equality and human rights), and
corporate governance (i.e., bribery and corruption).
3
Tuan (2014) measured the clinical governance using four clinical gover-
nance dimensions, including patient-centeredness in healthcare, patient
care quality improvement, supporting nurses, and sustainable clinical
leadership.
4
See Rao and Tilt (2016), Velte (2017a), Velte (2017b), and Velte and
Stawinoga (2020).
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How to cite this article: Uyar A, Kuzey C, Kilic M,
Karaman AS. Board structure, financial performance, corporate
social responsibility performance, CSR committee, and CEO
duality: Disentangling the connection in healthcare. Corp Soc
Responsib Environ Manag. 2021;1–19. https://doi.org/10.
1002/csr.2141