Corporate governance and corporate social responsibility (CSR) disclosure in an emerging economy: evidence from commercial banks of Kazakhstan

Abstract

Purpose This paper aims to explore the extent and nature of corporate social responsibility (CSR) reporting practices in the banking sector of Kazakhstan and investigates the effects of board characteristics on CSR disclosures in the given emerging economy. Design/methodology/approach Data on CSR disclosures were manually collected from annual reports of all commercial banks listed in the Kazakhstan Stock Exchange (KASE) for the period 2010-2016. Financial data were obtained from audited financial statements available on bank websites and the Web page of the National Bank of Kazakhstan. Findings The empirical results reveal that board gender diversity has a positive influence on CSR reposting, while board size and board independence have no impact on the level of CSR disclosures. Furthermore, the results show that bank size and bank age are significant factors in the dissemination of CSR disclosures. Additionally, the findings suggest that banks with a share of foreign ownership disclose more extensive and transparent information on CSR activities than banks owned by local investors and state-owned banks. Originality/value The study provides evidence on the relationship between corporate governance and the level of CSR in the context of an emerging economy such as Kazakhstan, representing the Central Asian region. The study contributes to the current literature by focusing on the banking sector of Kazakhstan as a research context due to its substantial representation in the capital market of the given emerging economy.

Human Resource Disclosures in Corporate Annual Reports of Insurance Companies: A Case of Developing Country

“…In addition, these findings are in line with other financial institutions, namely bank disclosure [94] and recent research on the agency issues [95,96] and insurance sector [74]. Ullah et al [74] and Orazalin [94] indicated that ownership is correlated to the extent of corporate social responsibility disclosures in insurance companies. The companies are service companies and human resources in the companies have direct contact to customers and important role in value creation.…”

Corporate Social Responsibility in Kazakhstan

“…According to stakeholder theory, the long-term survival and sustainable development of an entity depend on the support of all stakeholders (van der Laan Smith et al 2005;Orazalin 2019). The theory suggests that a firm's objectives and goals can be realized by balancing the competing interests and demands of various stakeholder groups (such as employees, customers, suppliers, auditors, shareholders, and the general public) (Freeman 1984;Mahmood and Humphrey 2013).…”

“…(Chakroun et al 2017). Stakeholder theory is quite relevant to CSR in Kazakhstan because it supports improvements in several CSR issues, such as CSR disclosures; robust implementation of CSR activities; environmental activism; and policies that aim to satisfy the needs and expectations of all stakeholders in a diverse and multicultural society like Kazakhstan (Orazalin 2019).…”

“…Kazakhstan enacted the Code on Corporate Governance in 2005 in accordance with the precepts of the OECD. The main idea was to enhance transparency, accountability, honesty, fairness, responsibility, and professionalism of business practices in the country (Orazalin 2019;Coffie et al 2018). Over the years, corporate governance practices in Kazakhstan have been influenced by various laws and regulations, such as the Law on Accounting and Financial Reporting, the Law on Joint Stock Companies, the Law on Banks and Banking Activities, and the Law on Securities Market.…”

“…This lack of compliance with corporate governance principles has made Kazakhstan to be considered as a risky business environment by foreign investors (Johannesson et al 2012;Mahmood and Humphrey 2013). While all financial institutions in Kazakhstan are obliged to prepare financial statements in accordance with the International Financial Reporting Standards, there are no mandatory requirements for disclosure of CSR activities by Kazakh-listed companies in their annual financial reports (Orazalin 2019;Cigna et al 2017). This means that the disclosure of information on CSR activities by Kazakhstani-owned companies only occurs on a voluntary basis.…”