Corporate governance and corporate social responsibility disclosures

Abstract

Purpose The purpose of this study is to explore the impact of corporate governance (CG) on the corporate social responsibility (CSR) disclosures. This is done in the context of firms operating in the Gulf Cooperation Council (GCC) countries and is largely based on the legitimacy theory, although other theories such as principal–agent theory and stakeholder theory are disucssed. Design/methodology/approach This study used the annual reports of 147 firms in the GCC countries, drawing on a legitimacy theory framework to determine the impact of CG characteristics, such as management ownership, ownership concentration, independence of board members, duality of CEO and chairman positions and the existence of an audit committee, on firms’ CSR disclosures to various stakeholders. Accordingly, the authors developed five hypotheses to examine the above variables and used a data set from Hawkamah – the Institute of Corporate Governance. This study covers a period of six years (2007-2012). The data set had been regressed in a multi-variate regression analysis. Findings The authors reported that greater managerial ownership and concentration of ownership have positive impact on CSR disclosures. The findings of this study also show that internal CG mechanisms, such as the independence of board members, the separation of powers, between the CEO and chairman positions and the existence of an independent audit committee, also have a positive influence on CSR disclosures. In addition, the leverage ratio, return on assets, company’s size and age emerge as important determinants of CSR disclosures; nevertheless, the company’s size and age are statistically not significant. These significant findings corroborate the recent concern with CG in developing countries that brings greater attention to CSR disclousures, as both internal and external CG mechanisms are effective in influencing the CSR practices. Practical implications This study fills the gap in literature by providing empirical evidence on the impact of CG on CSR disclosures in a significant region in the emerging economies. Furthermore, it alerts regulators, policy-makers, practitioners and firms’ executives in the GCC region and other developing countries to pay more attention to CG reforms and enforcement as well as to increase institutional pressures regarding CSR adaptation. Originality/value The study on how CG and CSR disclosures are connected has been limited. This study addresses this research gap and focuses on a region that has often been overlooked by accounting research.

Determinants of Sustainability Disclosure of Saudi Listed Companies

“…Andrikopoulos & Kriklani, 2013;Juhmani, 2014;Akbas, 2014;Hussainey et al, 2016;Nguyen et al, 2017;Khalid et al, 2017;Garg& Kumar, 2018). On the other hand, this does not support the findings reported by Elshabasy (2018) and Garas and ElMassah (2018).…”

“…Therefore, the second hypothesis is accepted. This result is consistent with the results reported by a number of studies (e.g., Rafique et al, 2017;Ortas et al, 2017;Hu & Loh, 2018;Garas & ElMassah, 2018). However, this result does not support the result reported by Primary and Rahardja (2013), Setyawan and Kamilla (2015) and Habbash (2015).…”

CSR Practices in Polish and Spanish Stock Listed Companies: A Comparative Analysis

“…It can be argued that the higher the national income, the more expenditure on CSR activities and the greater awareness of various stakeholders including enterprises about the need for further development in a socially responsible manner. Similar studies were conducted, e.g., by Venturelli, Caputo, Leopizzi, and Pizzi [39], Garas and El-Massah [41], Diaz-Carrion, López-Fernández and Fernández [53].…”

“…The following independent variables were used: managerial ownership, ownership concentration, board independence, CEO duality, and audit committee independence. The control variables were company size, company age, leverage, and ROA [41].…”

How to Lead the Board of Directors to a Sustainable Development of Business with the CSR Committees

“…There are arguments supported by the literature review about the relation between sustainability and concentrated ownership by family, state and institutional investors. Ownership structure and CSR have been widely examined [26,[99][100][101][102][103][104]. As regards to families, previous studies stated that when family owners, control, or manage the business a positive relation with social and environmental performance [105] is proved, as well as there are some research findings suggesting a negative relation [106][107][108].…”