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Running Head: CORPORATE PHILANTHROPY 1

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Assignment Name-Week X

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Professor Kemboi Michael

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CORPORATE PHILANTHROPY 2

Introduction

This chapter provides the summary of the findings from chapter four, and it also gives the

conclusions and recommendations of the study based on the objectives of the study.

Board Age

As evidenced in chapter four, board age has a positive and significant effect on corporate

philanthropy. Consistent with the findings, Rhodes (1983) elucidates that there is a significant

relationship between age and a variety of work-related attitudes. Precisely, a board comprised of

individuals of different age brackets possess a wide array of business experience and this of

essence to the board. Further support to the study findings is by Post et al., (2011) who posit that

has a clear influence on philanthropic decisions. The above notion is corroborated by Zajac &

Westphal (1996) who echoed that age is related to directors’ behaviour and their likelihood to

open up to new ideas about board functioning. Moreover, Kets de, Vries & Miller (1984) are of

the opinion that as directors mature, their generational behaviour increases and they maybe more

sensitive to society at large hence more willing to contribute to the society’s welfare. The study

findings are also corroborated by Bekiroglu et al., (2011) who noted that the sensitivity

evidenced by younger generations of directors to environmental and ethical issues leads to

socially responsible and environmentally friendly behaviour. Besides, Aguilera & Jackson

(2010) infer that different age among directors is likely to lead to a more balanced decision

making hence making it possible for the firm to take into account the firm’s responsibility to a

larger array of stakeholders.

Board Gender

Furthermore, board gender has a significant effect on corporate philanthropy. In

corroboration with the study findings, Luthar et al., (1997) echo that women think more
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favourably of ethical matters than men. Particularly, Burgess & Tharenou (2002) state that

women tend to be more sensitive to corporate social responsibility including philanthropic

giving. Furthermore, a study by Ali, (2013) revealed a positive correlation between friendly

policies benefits for employees and female board members. Similarly, Bernardi et al., (2009)

found a positive correlation between female board members and community participation. The

study findings are also corroborated by Williams (2003) who revealed that organizations having

higher proportion of female board members engaged in more philanthropic actions and charity

donation giving as compared with a less proportion of female individuals in the board. In

addition, Harrigan & Slaughter, (2014) suggest that having women on board does exert some

influence on philanthropic activities, (Harrigan & Slaughter, 2014). Also, Bear et al, (2010)

found a positive relationship between corporate giving and the number of female directors on the

board.

Board Size

Additionally, the study revealed that board size has a significant effect on corporate

philanthropy. In line with the study findings, Sahin et al., (2011) posited that an appropriate

board size leads to the elimination of problems, protects shareholders’ interests and leads to

better corporate social responsibility performance. There is however a discord as to the

appropriate size of the board needed to enhance corporate philanthropy. For authors, such as Kiel

& Nicholson (2003) a large board size is key in enhancing corporate social responsibility actions

due to more experience, expertise, awareness, information and great contacts with other

organizations. However, according to Hermalin & Weisbach, (2001), a smaller board was better

at monitoring management and led to increased performance. As well, Xie & Fukumoto, (2013),
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argued that large board is slow in decision making and time wasting. The current study however

holds that a suitable board size affects corporate philanthropic activities of the organization.

Board Independence

Moreover, there is a significant relationship between board independence and corporate

philanthropy. The above assertion is supported by Sahin et al., (2011) who argued that a large

proportion of independent board members has a positive effect on better performance of

corporate charitable activities of the organization. In a similar vein, Finegold et al., (2007) posit

that boards dominated by independent directors are more vigilant in monitoring behaviour and

decision making of the company. Besides, Kamardin, & Haron, (2011) argue that Outside

directors bring in more skills and knowledge to the company which increases expertise necessary

for strategy implementation and corporate philanthropy. As well, Nassir et al., (2011) notes that

the presence of independent directors on board gives greater weight to board’s deliberations and

judgment. The Stewardship suggestion that a significant proportion of independent directors can

better understand not only the business processes but also the environmental factors also

corroborates the study findings. Additionally, a study conducted by Ibrahim et al., (2003)

revealed that outside board members are very much concerned regarding philanthropic

dimensions of corporate social responsibility.

Board Education

Finally, board education has a significant effect on corporate philanthropy. Cognate to the

results, O’ Nell et al., (1989) found out that board of directors’ education in a firm positively

increase levels of corporate social responsiveness. Precisely, organizations managed by educated

individuals tend to outperform those managed by uneducated managers. Besides, Maurizio et al.,

(2012) elucidate that qualified and skilful board members can be considered as a strategic
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resource to provide a strategic linkage to different external resources. As well, Ujunwa, (2012)

stipulates that board members with higher qualifications benefit the firms through a mix of

competencies and capabilities. Moreover, Westphal & Milton, (2000) echo that Members with

higher educational qualifications in general provide a rich source of innovative ideas to develop

policy with analytical depth and rigour that will provide for unique insights on corporate

philanthropy.