Effect of Board Size and Duality on Corporate Social Responsibility: What has Improved in Corporate Governance in Asia?

Abstract

The aim of this study is to examine the relationship between board size and CEO duality, and corporate social responsibility (CSR). A total of 91 public listed companies from Bursa Malaysia representing the sample of the current study were selected. Secondary data were used and sourced from annual report on the companies. Using descriptive statistics, the existence and the extent of CSR disclosure on Malaysian companies were ascertained. An analysis of the quantitative data was then made using the Partial Least Squares (PLS). The findings from this research show that the role of board size suggest a significant and positive relationship with CSR disclosure. On the other hand, CEO duality on CSR disclosure indicates a negative relationship. This research contributes to the existing literature in terms of the roles of board Size and CEO duality on CSR initiatives. Furthermore, It highlights the necessity of following the new trends in corporate governance field by investigating its mechanisms with the new trendsin financial Industry from Islamic perspective as this might be positively added to the field of corporate governance due to the high significant role for these two fields.

Does financial performance moderate the relationship between board attributes and corporate social responsibility in French firms?

“…From agency theory perspective, larger boards often suffer from inefficient decision-making, which is mainly due to coordination, communication and monitoring problems (Khaireddine et al, 2020;Ciampi, 2015), and this can negatively impact the corporate social responsibility (Tibiletti et al, 2021). It is suggested, also, that CEO-chair duality leads to the concentricity of decision-making and control and increases the information asymmetry between the CEO and the board (Barnea and Rubin, 2010;De Villiers et al, 2011); this consequently would negatively affect CSR policies (Guerrero-Villegas et al, 2018;Alabdullah et al, 2019;Campanella et al, 2021) Thus, according to agency theory, the CEO duality model should be avoided (Velte, 2019).…”

“…From stakeholder theory perspective, board size is considered as one of corporate governance tools used to protect and promote stakeholders' interests (Khan et al, 2021;Zaid et al, 2020;Zubeltzu-Jaka et al, 2020;Roffia et al, 2021;Al Fadli, 2020). Larger boards would have a variety of knowledge, skills and experiences, which improve the board's ability to supervise and control managerial opportunistic actions; thus, improve CSR performance (Endrikat et al, 2020;Alabdullah et al, 2019;Birindelli et al, 2018;Lagasio and Cucari, 2019). Similarly, stakeholder theory supports the importance of having outside directors in board composition to detect opportunist management behavior (Haque, 2017) and meet key stakeholders' expectations (Tibiletti et al, 2021).…”

“…Corporate social responsibility (CSR) is one of the key issues that has been brought to the fore by corporate governance over the past decade (Khaireddine et al, 2020;Jo and Harjoto, 2012;Velte, 2019;Alabdullah et al, 2019;Rachid, 2021;Al-Mamun and Seamer, 2020;Majeed et al, 2015;Cordova et al, 2021). Corporate governance is a system of rules, policies and practices that dictate how a firm's board of directors manages and monitors the operations of their company (Tibiletti et al, 2021;Cadbury, 2000).…”

CEO Characteristics, Family Ownership and Corporate Social Responsibility Reporting: The Case of Saudi Arabia

“…In our model, we controlled for several corporate governance variables. As external directors are delegates of various stakeholders and are eager to fulfill the expectations of stakeholders, firms that have frequent board meetings (BMET), a larger board size (BSIZ), and a greater number of directors who are independent (BIND) should have better CSR reporting [79,80]. The BMET is measured as the total number of meetings held by board of directors, BSIZ is measured as total number of directors on the board of the firm, and BIND is measured as the ratio of independent directors over the total board [37,[81][82][83][84][85][86][87][88][89][90][91][92].…”

Corporate Governance Characteristics and Environmental, Social & Governance (ESG) Performance: Evidence from the Banking Sector of Pakistan

“…The board's main duties, according to the agency theory, are to regulate management's operations in order to make sure the company's integrity, objectivity, accountability, and transparency (Hegazy, M., & Hegazy, 2010;Rahman, Zahid, & Khan, 2021).Transparency in the boardroom improves with a larger boardLevit, & Malenko (2016)argue that it is more efficient since it has a wider range of knowledge, skills, and capacities to monitor and supervise the organization's actions (Almutairi, & Quttainah, 2017;Tawfeeq et al, 2019).on the other sideAdnan, Htay, Rashid, & Meera(2011)A larger board is inefficient due to the slow nature of decision-making, which makes achieving corporate consistency difficult.Board's primary job, according to Al Azeez, Sukoharsono, & Andayani ( 2019), is to oversee the firm's internal and external operations to create positive outcomes.The next step is to assess the administration's performance. It contributes to the company's growth, drives management toward certain goals, and communicates the major goals of the firms.In addition, by agency theory, the board size has an influence on the organizational environment.…”