Board involvement in corporate sustainability reporting: evidence from Sri Lanka

Abstract

Purpose The purpose of this paper is to explore the role played by the board of directors in corporate sustainability (CS) disclosure within the Asian context in which sustainability reporting (SR) is an emerging phenomenon. Design/methodology/approach Data are collected from a sample of 100 listed Sri Lankan companies over a period of four years (2012-2016), representing practically all the business sectors. This study draws on both agency and resource dependence theories, while binary logistic regression is performed for the data analysis. Findings The results point out that firms that follow a sustainability disclosure policy have larger boards, a higher proportion of independent directors and more female directors. Contrary to certain common assumptions, firms that practice sustainability disclosure are not influenced by dual leadership, board ethnicity and board ownership. This study helps firms to understand whether their boards can influence the sustainability disclosure choice or not and further, to validate the appropriateness of the agency theory and the resource dependence theory for examining issues of this nature. Originality/value This study contributes significantly to the extant literature on this subject by broadening the geographical coverage, which has generally been limited to the West in corporate disclosure studies.