The relationship between board of directors’ structure and company ownership with corporate social responsibility disclosure

Abstract

Purpose This study aims to examine the effect of the structure of board of directors and company ownership on social responsibility disclosure of listed companies on the Tehran Stock Exchange. Design/methodology/approach The variables of the study included independent board of directors, institutional ownership, managerial ownership, family ownership and family-managerial ownership. The study population consisted of 125 listed companies on the Tehran Stock Exchange during the years 2009-2014. Content analysis used to measure social responsibility disclosure level and test hypothesis was performed using multiple regression analysis. Findings The results demonstrated that there was no significant relationship between any of the independent variables and the level of social responsibility disclosure. This study empirically shows managers, investors and other stakeholders that if business owners are made of different groups, namely, institutional ownership, managerial and family ownership, it will not affect the social responsibility disclosure in annual reports. Originality/value The outcomes of the current study may bridge the gap between social responsibility disclosure and ownership structure in a developing country like Iran.

Empirical study on the effective factors of social responsibility disclosure of Iranian companies

“…In other words, the younger a firm is, the less likely it is that it gets involved in CSR. Furthermore, in an interesting study, Salehi et al (2017) found that the structure of the board of directors and company ownership does not affect CSR disclosure in Iranian market. Some previous studies have shown that on the condition that firms are larger, the level of CSR disclosure will increase (Adams et al, 1995;Belkaoui and Karpik, 1989;Cullen and Christopher, 2002;Cormier and Magnan, 2003;MohdGhazali, 2007;Naser et al, 2006;Brammer and Pavelin, 2008;Reverte, 2009;Chih et al, 2010;Suttipun and Stanton, 2011;Bouten et al, 2011;Setyorini and Ishak, 2012;Al-Gamrh and AL-Dhamari, 2016;Syed and Butt, 2017;Issa, 2017;Wuttichindanon, 2017), whereas Roberts (1992), Barako et al (2006) and Smith et al (2007) did not find such an association.…”

“…From Aguilera et al's (2007) and Salehi et al's (2017) point of view, researchers still disagree on fundamental topics of what establishes social responsibility. For example, CSR contains economics, law, ethics and philanthropic expectations of business units that extend to all beneficiaries (Salehi et al, 2017). Beneficiaries could be defined as any individual or group that affects the decisions, strategies or the organization's purposes (Danko et al, 2008).…”

“…Internal stakeholders are employees and shareholders who are directly influenced by the company's decisions and operations, whereas external stakeholders are citizens, customers, suppliers, competitors, government and societal institutions. There is no getting away from the fact that corporations should respect the interests of the stakeholders and society and should be responsible for all of them (Clarkson, 1995;Salehi et al, 2017). The following six cases contain detailed information about CSR toward the environment, products, human resources, customers and society:…”

“…In less developed countries, audit fees are determined by the level of activity and characteristics of auditors, and the determinants of audit fees in most of these countries include the size of companies, the complexity and scope of operations, and the type of auditor who audits the financial statements of the company (Karim, 2010). Based on the agency theory, there is a conflict of interest between managers and owners which results in creating agency costs (Salehi et al, 2017). What is worth mentioning is that using CSR optional disclosure, corporate managers are apt to show they are really interested in taking steps into the interests of shareholders (Salehi et al, 2017).…”

Carbon Emission Disclosure and Profitability – Evidence from Manufacture Companies in Indonesia

“…Stakeholder theories state that to explain how companies monitor toward the relationships among stakeholders with the information company [19]. In the ethics, stakeholders support the company's concern for the social and the environment [51]. Boards with greater independence or neighborhood committees exhibit a greater tendency toward ecological transparency [29].…”