Date of Award


Degree Type


Degree Name

Master of Business


Faculty of Business and Law

First Advisor

Marilym Clark-Murphy


This thesis explores the theoretical and empirical evidence for a relationship between corporate social performance (CSP) and financial characteristics. An empirical analysis is performed to examine the Australian evidence for such a relationship, from a financial asset perspective. CSP data provided by Corporate Monitor Pty. Ltd. are used in the analysis. Specifically, available measures of environmental, social and governance performance of 237 Australian companies are compared with selected financial asset characteristics, including firm size, book-to-market value, financial performance and risk, covering the period between July 1997 and August 2003. Evidence of relationships is sought using bivariate correlations, group comparisons and multivariate regression models. The analysis allows for heterogeneity in CSP-financial characteristics relationships, related to firm size, trading history and industry. Findings indicate that governance performance is most strongly related to characteristics, followed by social performance, whereas environmental is in general not strongly or consistently related to financial characteristics. Very strong and consistent evidence is found of a negative relationship between risk and all categories of CSP, although such relationships are again strongest for corporate governance. Strong evidence is found of a positive relationship between financial performance and governance performance (and to a certain extent social-performance), which is concentrated among recently listed companies, large companies and constituents of an industry group containing banks, diversified financials, insurance companies and telecommunication companies. Environmental and social performance is found to be contingent on size and industry, whereas governance performance is found to be contingent predominantly on size. However, the causes of the relationships between environmental and social performance and size are suggested to be different from the causes of the relationships between governance performance and size.