For exploring the reaction between the hydroxyl groups of lignin and boric acid under the alkaline condition, we study three proposed mechanisms for the formation of the anionic borate diester (ABDE) using the salicyl alcohol anion as the model compound by the density functional theory. ABDE has high flame retardancy and is a potentially practical application of lignin. The catalysis of sodium cation is found to enhance the deprotonation of the water cluster. The deprotonated product, hydroxide anion, is essential to the critical step, which is the cleavage of B-O bonds of the boric acid molecule, in reaction mechanisms. The energy profiles of the mechanisms show that the reaction between lignin and boric acid may start from the hydroxymethyl moieties of lignin since it requires less energy for the aforementioned critical step than from the phenol moieties of lignin. Moreover, the hydroxide anions compete with the hydroxymethyl groups in lignin for the formation of B-O bonds by forming tetrahydroxyborate anion (TBA) which requires very high activation energies to further react to the desired product ABDE. The optimal condition is to enhance the catalytic effect of sodium cations and meanwhile to control the formation of TBA.