In the Corporate Governance Model, What Is the Influence of CSR Practices on Firm Social Performance? The Case of the European Oil & Gas Industry

In recent decades, an increasing number of scholars as well as top managers and consultants realized that Corporate Social Responsibility (CSR) is gaining a momentum in line with the recent documents issued by the European Commission. Recent collapses, corporate frauds and the crisis of investor’s confidence moved toward the development of ethical codes and the companies’ orientation to a more sustainable corporate governance model that is building up all over the world. This research aims to investigate, whether and to what extent, the corporate governance practices, addressed on CSR, exert an influence on firm social performance. The empirical analysis is focused on a sample of companies belonging to the oil & gas industry and listed on major European stock markets. The data collection covers the period 2010-2014 and follows by authoritative secondary sources (Asset4, Thomson Reuters and Amadeus, Bureau van Dijk). This study uses a multi-theoretical framework to answer the research question above mentioned through the combination of three theories: legitimacy theory, stakeholder theory and resource-based view (RBV) theory. In this research design, the dependent variable is the social score as a proxy of corporate sustainability performance. The independent variables seek to capture some scopes inherent to the corporate governance practices, focused on CSR; the firm financial performance; the corporate governance model effectiveness and the stakeholder engagement approach. Our results show that corporate governance practices, addressed on CSR, positively affect the social score, i.e. corporate sustainability performance. Specifically, this analysis demonstrated the influence of some internal drivers over firm social performance that can produce clear benefits for improving, on one side, the corporate governance model and, on the other side, the corporate culture, on the basis of the effects ensuing from the adoption of a stakeholder engagement approach