“…Institutional directors are receiving attention from academic researchers (Baums, Buxbaum, & Hopt, ; Bhojraj & Sengupta, ; Black, ; Gillan & Starks, ) due to the monitoring role they play while sitting on boards, their active behaviour in response to the corporate governance problems of firms (Brickley, Lease, & Smith Jr., ; Pucheta‐Martínez & López‐Zamora, ) and their capacity as disciplinary managers (Lee & Roberts, ). Furthermore, Lee and Roberts () argue that such directors have many incentives “to prefer firms with better corporate governance mechanisms.” Thus, it is logical to consider that firms with institutional directors on boards will be more likely to be transparent and encourage CSR reporting, as the costs associated with their monitoring role will be lower in responsible companies. This argument is supported by previous research (Charitou, Louca, & Panayides, ; Ljungqvist, Marston, Starks, Wei, & Yan, ; Wan‐Hussin, ), which shows that institutional directors raise corporate transparency and reduce fraudulent accounting practices, inter alia.…”