Who Is Acting Unethically? The Role of Board Diversity in Corporate Social Responsibility Decoupling

ABSTRACT Corporate social responsibility (CSR) is a strategic tool for engaging stakeholders and signaling a firm's values. However, CSR decoupling—failing to align actions with stated commitments—can undermine these benefits and pose risks. Drawing on neo–institutional theory, we propose that firms with different board characteristics vary in their use of outcome–communication decoupling as a symbolic response to institutional pressures. In addition, based on the resource‐based view, we argue that a more diverse board—in terms of gender, major, and university background—brings together heterogeneous values and cognitive frames, enhances internal monitoring, and improves decision‐making quality, thereby reducing the likelihood of CSR decoupling. We test and find empirical support for these propositions using a panel dataset of Chinese listed firms from 2010 to 2020. However, this mitigating effect is weakened in environments characterized by higher levels of market competition. Furthermore, we explored the heterogeneity of these effects across different contexts, including foreign ownership, industry‐level pollution exposure, and regional marketization. This study advances the literature by elucidating the role of board diversity in curbing symbolic CSR practices under external institutional pressures, while also offering a contextualized understanding of CSR decoupling in China's evolving institutional landscape. The findings offer important theoretical and practical implications for managing CSR decoupling.