How do entrenched boards reduce human rights violations? An empirical analysis

As part of corporate social responsibility, companies invest in activities that promote human rights or refrain from activities that violate human rights. Investments in human rights, however, usually do not yield immediate benefits. Rather, they are expected to improve the reputation of the firm over time as a good corporate citizen. As one of the most effective takeover defences, a staggered board insulates managers from the takeover market. Secured in their positions, managers are less likely to be myopic and are more likely to adopt policies that yield long-term benefits, such as investments in human rights. Consistent with this notion, our results show that firms with a staggered board exhibit much better human rights performance. We also show that our results are not likely driven by endogeneity.