Can Director And Executive Liability Insurance Promote Listed Companies To Undertake Social Responsibility?

In recent years,more and more attention has been paid to corporate social responsibility in China.Corporate social responsibility refers to that in the process of production and operation,enterprises should not only take the interests of shareholders as the sole goal,but also consider the interests of other stakeholders,including employees,consumers,upstream and downstream manufacturers and ecological environment.Since the return brought by the investment in social responsibility of enterprises will not show in the short term,but may lead to the decline of short-term financial performance,many corporate executives will neglect to undertake social responsibility.As an effective tool of corporate governance,directors’ and executives’ liability insurance can transfer the practice risk of corporate executives and relieve their worry of being held accountable for poor management.Therefore,this paper believes that purchasing directors’ and executives’ liability insurance can promote corporate social responsibility.In this thesis,the A-share listed companies in Shanghai and Shenzhen during 2010-2019 are selected as research samples to analyze whether director and senior executive liability insurance can promote corporate social responsibility through empirical research.The results show that:(1)The purchase of directors’ liability insurance can promote corporate social responsibility,and this promoting effect is more obvious in enterprises with a higher proportion of female executives and regions with a higher degree of marketization;(2)The nature of state-owned property rights will weaken the promoting role of directors’ and senior executives’ liability insurance for corporate social responsibility;(3)Higher executive compensation can enhance the promoting role of directors’ executive liability insurance on corporate social responsibility;(4)The purchase of directors’ liability insurance can enhance corporate social responsibility by attracting outstanding management talents and improving the management level of senior management team;(5)The purchase of directors’ liability insurance can enhance corporate social responsibility by attracting overseas executive talents and improving the executive team’s awareness and emphasis on social responsibility.