Effectiveness of the KLD Social Ratings as a Measure of Workforce Diversity and Corporate Governance

Jingoo Kang

    Research output: Contribution to journalArticlepeer-review

    Abstract

    This article examines how well the Kinder, Lydenberg, Domini Research & Analytics (KLD) ratings measure past corporate social performance and predict future corporate social performance in Diversity and Governance categories. The results show that the KLD ratings effectively measure (past) and predict (future) social performance in both categories. The results also suggest that the KLD ratings may identify differences in the quality of management and firm which can affect future social performance and is not entirely explained by past social performance. The findings of this study lend some support for empirical studies relying on the KLD ratings to operationalize corporate social performance. The findings suggest that users of the ratings need to have a clear understanding of what information they are seeking from the KLD ratings in order to maximize the utility of these ratings.

    Original languageEnglish (US)
    Pages (from-to)599-631
    Number of pages33
    JournalBusiness and Society
    Volume54
    Issue number5
    DOIs
    StatePublished - Sep 19 2015

    Keywords

    • corporate social performance (CSP)
    • corporate social responsibility (CSR)
    • quantitative methods

    ASJC Scopus subject areas

    • Business, Management and Accounting (miscellaneous)
    • Social Sciences (miscellaneous)

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