Corporate social responsibility disclosure and information asymmetry: does boardroom attributes matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amal Hamrouni ◽  
Mondher Bouattour ◽  
Nadia Ben Farhat Toumi ◽  
Rim Boussaada
Keyword(s):  
Information Asymmetry ◽  
Gender Diversity ◽  
Moderating Effect ◽  
Board Independence ◽  
Environmental Disclosure ◽  
Content Type ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Relationship ◽  
Social Disclosure

PurposeThe current study aims to investigate the relation between corporate social responsibility (CSR) and information asymmetry, as well as the moderating effect of board characteristics (gender diversity, size and independence) on this relationship.Design/methodology/approachThis paper uses a panel data regression analysis with the system generalized method of moments (SGMM) estimator of nonfinancial French firms included in the SBF 120 index. The environmental and social disclosure scores are collected from the Bloomberg database, while financial data are collected from the FactSet database.FindingsThe empirical results demonstrate that environmental disclosure has a positive impact on the level of information asymmetry, while social disclosure has no effect on the information environment. Gender diversity and board independence negatively impact the opacity index, while board size has a positive effect. The presence of women in board composition has a substitution effect on the relationship between environmental disclosure and information asymmetry. There is no moderating effect of board size on the association between CSR disclosure and information asymmetry. However, the proportion of independent female directors and board independence operates as substitutes to social disclosure on reducing information asymmetry.Research limitations/implicationsAlthough the models include the most common control variables used in the literature, they omit some variables. Second, the results should be interpreted with caution and should not be generalized to the entire stock market since the sample is based on large French companies.Practical implicationsThe results of this study may be of interest to managers, investors and French market authorities since France is characterized by highly developed laws and reforms in the area of CSR. In addition, the paper leads to a better understanding of how women on the board, in particular, independent female directors, affect the relationship between CSR disclosure and information asymmetry. This could be of interest to French authorities, which has encouraged the appointment of women through the adoption of the Copé–Zimmermann law.Originality/valueFirst, to the best of the authors' knowledge, this is the first study to explore the moderating effect of board characteristics on the relationship between CSR and information asymmetry. Second, unlike previous studies using individual proxies to measure information asymmetry, the authors favor the opacity index of Anderson et al. (2009). They calculate this index by including a fifth individual measure, namely, share price volatility. The opacity index better describes the information environment of companies than individual measures since it reflects the perceptions of investors and analysts together.

The direct and indirect effect of the existence of risk management on the relationship between audit committee and corporate social responsibility disclosure

2018 ◽  
Vol 25 (9) ◽  
pp. 4125-4138 ◽  
Author(s):  
Sami R.M. Musallam
Keyword(s):  
Risk Management ◽  
Indirect Effect ◽  
Audit Committee ◽  
Committee Meeting ◽  
Content Type ◽  
Financial Expertise ◽  
Csr Disclosure ◽  
Corporate Social ◽  
Relationship Of ◽  
The Relationship

PurposeThe purpose of this paper is to investigate the direct and indirect effect of the existence of risk management on the relationship between audit committee and corporate social responsibility (CSR) disclosure in Palestine.Design/methodology/approachThe study utilizes a panel data of 31 Palestinian listed companies from 2010 to 2016. It also utilizes structural equation modeling (SEM) model.FindingsThe results of SEM model find a significant positive relationship of the existence of risk management, audit committee meeting and audit committee size with CSR disclosure. However, audit committee financial expertise has a significant negative relationship with CSR disclosure. The results also find a significant relationship of audit committee meeting and audit committee financial expertise with CSR disclosure through the existence of risk management.Practical implicationsThis study is important to policymakers, accounting professionals and shareholders on the extent to which audit committee related to such committee efficiency in monitoring CSR disclosure.Social implicationsThis study adds to the existing literature by investigating the direct and indirect effect of the existence of risk management on the relationship between audit committee and CSR disclosure in Palestine as one of the youngest market in region that assists to test the validity of agency theory in a young and small emerging market context.Originality/valueIt is the first study to investigate the direct and indirect effect of the existence of risk management on the relationship between audit committee and CSR disclosure in Palestine.

scholarly journals Board and corporate social responsibility disclosure of multinational corporations

2019 ◽  
Vol 27 (1) ◽  
pp. 77-98 ◽  
Author(s):  
Hanh Thi Song Pham ◽  
Hien Thi Tran
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Multinational Corporations ◽  
Board Independence ◽  
Content Type ◽  
Csr Reporting ◽  
The One ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Impact

Purpose This paper aims to investigate the effects of board model and board independence on corporate social responsibility (CSR) disclosure of multinational corporations (MNCs). Design/methodology/approach The authors developed an empirical model in which CSR disclosure is the dependent variable and board model (two-tier vs one-tier), board independence (a proportion of independent directors on a board) and the interaction variable of board model and board independence together with several variables conventionally used as control variables are independent variables. The authors collated the panel dataset of 244 Fortune World’s Most Admired (FWMA) corporations from 2005 to 2011 of which 117 MNCs use the one-tier board model, and 127 MNCs use the two-tier board model from 20 countries. They used the random-effect regression method to estimate the empirical models with the data they collated and also ran regressions on the alternative models for robustness check. Findings The authors found a significantly positive effect of a board model on CSR disclosure by MNCs. Two-tier MNCs tend to reveal more CSR information than one-tier MNCs. The results also confirm the significant moderating impact of board model on the effect of board independence on CSR disclosure. The effect of board independence on CSR disclosure in the two-tier board MNCs tends to be higher than that in the one-tier board MNCs. The results do not support the effect of board independence on CSR disclosure in general for all types of firms (one-tier and two-tier board). The impact of board independence on CSR disclosure is only significant in two-tier board MNCs and insignificant in one-tier board MNCs. Practical implications The authors advise the MNCs who wish to improve CSR reporting and transparency to consider the usage of two-tier board model and use a higher number of outside directors on board. They note that once a firm uses one-tier model, number of IDs on a board does not matter to the level of CSR disclosure. They advise regulators to enforce an application of two-tier board model to improve CSR reporting and transparency in MNCs. The authors also recommend regulators to continue mandating publicly traded companies to include more external members on their boards, especially for the two-tier board MNCs. Originality/value This paper is the first that investigates the role of board model on CSR disclosure of MNCs.

Seeking legitimacy

2019 ◽  
Vol 11 (6) ◽  
pp. 1009-1021 ◽  
Author(s):  
Dennis M. Patten
Keyword(s):  
Relevant Literature ◽  
Legitimacy Theory ◽  
Environmental Disclosure ◽  
Content Type ◽  
The Social ◽  
The Usa ◽  
Social And Environmental Disclosure ◽  
The Rich ◽  
Csr Disclosure ◽  
Corporate Social

Purpose In this essay, the author reflects on the legitimacy theory in corporate social responsibility (CSR) disclosure research. Design/methodology/approach This is a reflection/review essay based on a review of relevant literature. Findings Although almost constantly under attack from a variety of scholars, legitimacy theory seems to hold on in the social and environmental disclosure arena. However, the failure of the recent wave of CSR-themed work published in The Accounting Review to even acknowledge, let alone engage with, the theory is problematic. Research limitations/implications We, in the CSR disclosure arena, need to do all we can to help emerging scholars (particularly in the USA) find the rich body of research the mainstream journals fail to discuss. Practical implications Legitimacy-based research can help move CSR disclosure at least closer to being a tool of accountability, as opposed to a tool for legitimation. Social implications Perhaps the critique of the mainstream North American literature’s failure to consider legitimacy theory can lead to the recognition of the need to focus on the harm to sustainability that a narrow, shareholder-centric focus leads to. Originality/value This reflection takes a unique look at the contributions of legitimacy theory to CSR disclosure research.

Corporate social responsibility and financial analysts: a review of the literature

2019 ◽  
Vol 10 (1) ◽  
pp. 183-207 ◽  
Author(s):  
Anne-Kathrin Hinze ◽  
Franziska Sump
Keyword(s):  
Financial Analysts ◽  
Future Research ◽  
Analyst Coverage ◽  
Content Type ◽  
Current State ◽  
State Of Research ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Relationship ◽  
Csr Engagement

PurposeThe purpose of this paper is to systematise the current state of research on the association between companies’ corporate social responsibility (CSR) engagement and financial analysts’ company assessment. Additionally, it aims to identify fruitful directions for future research that contribute to a further exploration of the link between CSR and financial analysts.Design/methodology/approachThis study reviews and synthesises existing research on CSR and financial analysts. Based on the research question, “What is the relationship between CSR engagement and financial analysts’ metrics?,” the authors conduct a systematic literature review. The authors search three major databases and use an extensive search term to ensure exhaustive coverage of the field. The paper then systemises the current state of research and identifies knowledge gaps and potential directions for future research.FindingsThe review of existing research shows that several studies confirm a positive link between CSR performance and analyst coverage, suggesting that external monitoring through analysts incentivises companies to enhance their CSR engagement. Further, results indicate that a company’s involvement in “sin” industries is linked to lower analyst coverage. Besides, a higher level of CSR disclosure is positively associated with analyst forecast accuracy, thus indicating that the provision of CSR-related information is linked to an enhanced information environment. High levels of CSR performance are associated with more positive recommendations from analysts. However, recent surveys and interview studies on analysts’ perceptions of CSR fail to uniformly support an increasing interest in CSR.Research limitations/implicationsFor a better understanding of the link between CSR engagement and financial analysts, two fruitful directions for future research are observed. First, future research designs should clearly differentiate between CSR disclosure and CSR performance and take account of interdependencies between them. Second, studies should address behavioural insights into how analysts process information and the influence of individual analyst characteristics on the link between CSR engagement and an analyst’s assessment of a company.Originality/valueThis study is the first to review the literature on the relationship between CSR and financial analysts. The association between CSR and financial analysts is particularly interesting given the pivotal role financial analysts play as information intermediaries in financial markets. This study delivers an in-depth understanding of existing studies and their theoretical underpinnings. Based on the existing literature, this paper develops innovative directions for future research.

scholarly journals Impact of governance structures on environmental disclosures in the Middle East and Africa

2020 ◽  
Vol 20 (4) ◽  
pp. 739-763 ◽  
Author(s):  
Erhan Kilincarslan ◽  
Mohamed H. Elmagrhi ◽  
Zezeng Li
Keyword(s):  
Corporate Governance ◽  
Middle East ◽  
Gender Diversity ◽  
Governance Structures ◽  
Environmental Disclosure ◽  
Content Type ◽  
Environmental Disclosures ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

Purpose This study aims to investigate the impact of corporate governance structures on environmental disclosure practices in the Middle East and Africa (MEA). Design/methodology/approach The research model uses a panel data set of 121 publicly listed (non-financial and non-utility) firms from 11 MEA countries over the period 2010-2017, uses alternative dependent variables and regression techniques and is applied to various sub-groups to improve robustness. Findings The empirical results strongly indicate that MEA firms with high governance disclosures tend to have better environmental disclosure practices. The board characteristics of gender diversity, size, CEO/chairperson duality and audit committee size impact positively on MEA firms’ voluntary environmental disclosures, whereas board independence has a negative influence. Research limitations/implications This study advances research on the relationship between corporate governance structures and environmental disclosure practices in MEA countries, but is limited to firms for which data are available from Bloomberg. Practical implications The results have important practical implications for MEA policymakers and regulators. The positive impact of board gender diversity on firms’ environmental disclosures, policy reforms should aim to increase female directors. MEA corporations aiming to be more environmentally friendly should recruit women to top managerial positions. Originality/value This is thought to be the first study to provide insights from the efficiency and legitimation perspectives of neo-institutional theory to explain the relationship between MEA firms’ internal governance structures and environmental disclosures.

scholarly journals The Role of Gender Diversity on Tax Aggressiveness and Corporate Social Responsibility: Evidence from Italian Listed Companies

2020 ◽  
Vol 12 (5) ◽  
pp. 2007 ◽  
Author(s):  
Andrea Vacca ◽  
Antonio Iazzi ◽  
Demetris Vrontis ◽  
Monica Fait
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Gender Diversity ◽  
Global Reporting Initiative ◽  
Tax Aggressiveness ◽  
Csr Reporting ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Relationship

The paper aims to examine the moderating role of gender diversity within a corporate board on the relationship between tax aggressiveness and a firm’s corporate social responsibility (CSR) approach. This analysis was conducted using a set of indicators of financial statements of 168 Italian listed firms between 2011 and 2018. In addition, the sustainability reports of the same companies were observed. To perform the analysis a logit regression model is used. This paper shows different empirical results. First, this study notes that there is not a direct relationship between tax aggressiveness and CSR reporting. Second, gender diversity in a board of directors increases the orientation of companies to CSR disclosure, but does not have an impact on the relationship between tax aggressiveness and CSR disclosure. Instead, CEO gender has a positive influence on the relationship between corporate tax planning and CSR reporting in accordance with Global Reporting Initiative (GRI) standards. This study emphasizes the key role of gender diversity in the growth of the CSR approach and the reputation of companies. Therefore, governments and policymakers of major countries should promote gender diversity in corporate decision-making bodies, which contributes to achieving the Sustainable Development Goals (SDGs).

Exploring the role of corporate social responsibility skepticism in ethical purchase intention

2019 ◽  
Vol 16 (2) ◽  
pp. 291-307 ◽  
Author(s):  
Salmi Mohd Isa ◽  
Phaik Nie Chin ◽  
Irene Liew
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Peer Influence ◽  
Purchase Intention ◽  
Moderating Effect ◽  
Equation Modeling ◽  
Research Approach ◽  
Content Type ◽  
Corporate Social ◽  
The Relationship

Purpose Few studies exist which delve into the possible factors that prevent ethically minded consumers from translating their ethical perceptions into ethical purchase intention (EPI). Thus, this study aims to explore how consumers assess corporate social responsibility (CSR) based on several influencing factors toward EPI, with CSR skepticism (SKP) as a moderator. Design/methodology/approach This cross-sectional study is conducted through a self-administered questionnaire and uses a positive research approach with a quantitative basis of enquiry. The partial least squares–structural equation modeling- model is used to examine the causal relationship between seven independent variables of CSR assessment (i.e. CSR awareness, knowledge of CSR position of company, cause importance, price consciousness, CSR image of company, credibility of CSR efforts and peer influence) with EPI. In addition, this study also examines the moderating effect of SKP in the relationship. Findings The findings show that CSR assessment factors are important to convert mere purchase criteria into EPI and SKP does play a significant role in weakening the relationship. Originality/value This study examines the moderating effect of CSR skepticism, the exploration of which still remains very limited in current literature.

Are corporate social responsibility disclosures relevant for lenders? Empirical evidence from France

2019 ◽  
Vol 58 (2) ◽  
pp. 267-279 ◽  
Author(s):  
Amal Hamrouni ◽  
Ali Uyar ◽  
Rim Boussaada
Keyword(s):  
Interest Rates ◽  
Three Dimensions ◽  
Cost Of Debt ◽  
Environmental Disclosure ◽  
Debt Contracts ◽  
Content Type ◽  
Negative Effect ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Cost

Purpose The purpose of this paper is to test whether or not CSR disclosure (i.e. aggregate as well as its three sub-indicators) reduces the cost of debt for French corporations listed in the SBF 120 index between 2010 and 2015. Design/methodology/approach CSR disclosure ratings of firms were collected from the Bloomberg database under three dimensions such as environmental, social and governance (ESG). Then, a pooled regression analysis was run. Findings The results indicate that overall CSR disclosure score as a combination of ESG disclosure scores has a negative effect on the cost of debt (i.e. lowers the cost of debt). While environmental disclosure is negatively associated with the cost of debt, social disclosure is unexpectedly positively associated, and governance disclosure has an insignificant association with the cost of debt. Research limitations/implications The study has two main limitations. First, the analysis does not consider contractual constraints and obligations that might exist in debt contracts (Jung et al., 2018). Second, the analyses cover a specific time period (i.e. between 2010 and 2015) for a specific country (i.e. France) excluding utilities and the financial sector. Practical implications Overall, it is inferred from the results that financial markets for lenders take into account CSR disclosure when assessing the creditworthiness of borrowers. Specifically, environmental disclosure is the only subdimension of CSR that is influential on creditors’ decisions to offer favorable interest rates. In line with this outcome, companies can assess their processes and be more aligned with eco-friendly practices, and investors are particularly advised to invest in those types of firms. Originality/value This study extends scant literature on the association between CSR and the cost of debt by exploring how creditors treat CSR dimensions dissimilarly in granting loans to firms. The findings of this study have particular importance as financial debt is one of the most predominant forms of external financing.

scholarly journals The Relationship between Corporate Sustainability Disclosure and Firm Financial Performance in Johannesburg Stock Exchange (JSE) Listed Mining Companies

2019 ◽  
Vol 11 (16) ◽  
pp. 4496 ◽  
Author(s):  
Tafadzwa Mark Wasara ◽  
Fortune Ganda
Keyword(s):  
Return On Investment ◽  
Stock Exchange ◽  
Corporate Sustainability ◽  
Environmental Disclosure ◽  
Corporate Social Disclosure ◽  
Johannesburg Stock Exchange ◽  
Sustainability Disclosure ◽  
Corporate Social ◽  
The Relationship ◽  
Social Disclosure

Whether corporate sustainability disclosure (CSD) affects profitability remains indistinct to many firms. This paper examines the relationship between corporate sustainability disclosure and return on investment. The sample of this study consisted of ten Johannesburg Stock Exchange (JSE)-listed mining companies, and the data was extracted from sustainability reports for a period of five years from 2010 to 2014. In this regard, data collection was undertaken by the adoption of a content analysis approach. A multi-regression analysis was used to analyze the relationship between environmental disclosure and return on investment. The same statistical mechanism was employed to determine the association involving social disclosure and return on investment. Results show that there is a negative relationship between environmental disclosure and return on investment. On the other hand, the research reveals that there is also a positive association between social disclosure and return on investment. This implies that an increase in corporate reporting of social issues results in heightened financial performance through an increase in return on investment. This study recommends the adoption of corporate social disclosure as it will encourage firms to be socially responsible, while also generating financial benefits. Further studies can be conducted about the change from voluntary corporate social disclosure to mandatory disclosure.

Does CSR disclosure influence financial performance of firms? Evidence from an emerging economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aditi Singh ◽  
Madhumita Chakraborty
Keyword(s):  
Financial Performance ◽  
Positive Association ◽  
Annual Reports ◽  
Data Set ◽  
Content Type ◽  
Government Interventions ◽  
Community Environment ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Relationship

Purpose This study aims to empirically examine the relationship between corporate social responsibility disclosure (CSRD) and financial performance (FP) in Indian firms. Design/methodology/approach Data for CSRD is collected by conducting content analysis of CSRD in annual reports of the sampled firms. A multidimensional measure of CSRD is constructed based on the stakeholder theory, consisting of six stakeholder groups – employees, customers, investors, community, environment and others. The aggregate CSRD measure is created by combining disclosure of the six CSR dimensions. Multiple regression analysis is used to examine the CSRD–FP linkage, controlling for the confounding effects of size, risk, age, industry, ownership and period. Findings The results of this study indicate that the aggregate CSRD measures, both for quality and quantity, have a positive association with the accounting measures of firms’ FP. However, the market measure of FP is observed to have a statistically insignificant association with aggregate quality and quantity of CSRD of Indian firms. Practical implications The results reveal that adopting transparent and extensive CSRD is relevant for the profitability of firms, and that government interventions are required to promote CSR programs, with a specific focus on the CSR dimensions that provide no apparent financial gains. Social implications This study recommends the adoption and reporting of CSR practices by Indian firms for their stakeholders. Originality/value This study contributes to the scarce literature on the CSRD–FP linkage in the context of emerging economies by using a more inclusive data set, creating a reliable measure of CSRD applicable to a large universe of firms and including relevant control variables that affect the CSRD–FP relationship.

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