Exploring the Relationship between CSR Reporting and Corporate Misconduct

While the literature on corporate social responsibility (CSR) has been growing, there is still a limited understanding of the connection between CSR reporting and corporate misconduct, especially in cases where the decision-making process is influenced by interactions between top management teams (TMTs) and boards of directors. The present study aims to fill this gap by exploring how this relationship is affected by factors such as chief executive officer (CEO) career horizon, TMT heterogeneity, and board size. This study develops and tests hypotheses with a sample of 90 construction firms in China from 2008 to 2017. The findings indicate that firms voluntarily issuing CSR reports are more likely to engage in illegal activities when the CEO career is longer and TMT heterogeneity is lower. Regarding the moderating role of board size, the result shows that large board size may not always imply better monitoring. While the positive impacts of CSR have been extensively emphasized, this study provides confirmation that it can also potentially lead to adverse behavior, such as corporate misconduct. Aligned with the upper echelon theory, this study substantiates the moderating roles of CEOs and TMTs. These findings are poised to make a contribution to the academic domain of CSR by elucidating the potential adverse outcomes of CSR activities and delineating the boundaries within which such outcomes occur.