Abstract
This article undertakes an empirical investigation on how firm board characteristics relate with corporate social responsibility disclosure (CSRD) in the banking industry of developing economies with a particular interest in Nigeria. The study focuses on a sample of 11 out of the 13 Nigerian listed national commercial banks which provide similar services and are subject to the same regulations and disclosure requirements by the Central Bank of Nigeria (CBN) from 2007 to 2018. Multiple regression analysis was employed on panel data obtained from the banks’ audited financial statements. The findings show that board with large number of persons, low proportion of persons operating outside the bank operations, and higher percentage of feminine directors on the board support higher level of corporate social responsibility (CSR). The results of large number of persons on board and better proportion of feminine administrators support the resource dependency theory and agency theory which offer the broad theoretical underpinnings for this study. The low percentage of nonexecutive administrators negates stand of bank regulators. This implies that banks with an oversized board size, gender diversity, and less board independence are seemingly favorably disposed to improve on CSR.
Highlights
Social responsibility (SR) in the business parlance is the commitment of business to behave ethically toward society
The study supports the agency theory perspective, which posits that if Corporate social responsibility (CSR) is seen as a solution to agency problem, good governance should appreciate it and be used to appreciate the value of the firm in the marketplace, but if it is seen as an agency problem, good governance should diminish the value of CSR
This study provides evidence that the two of the internal corporate governance (CG) mechanisms, namely, the size of board (BDS) and the gender diversity (BGD), which are presumed to promote both the shareholders’ and other stakeholders’ interests positively support more investment on CSR while the independence of the board aligns with the agency theory which kicks against CSR based on the assumption that managers should not be trusted to do a good job on CSR without implanting their selfish interests into the process which will negatively affect the bottom line of the banks
Summary
Social responsibility (SR) in the business parlance is the commitment of business to behave ethically toward society. The claim is rife that any business that relates ethically with its stakeholders operates a strategy that benefits the company, as well as society. Corporate social responsibility disclosure (CSRD) is the dissemination of information on what the firm has done or doing for the sake of the welfare and interest of the society. It can be in the area of philanthropy, environment conservation, and diversity in labor practices, human rights, and selfless services. Corporate governance (CG) is the system of rules, practices, and processes by which companies are governed or by which the rights and responsibilities in a firm are distributed among the stakeholders. One of the channels of delivering CG is the board of directors (BOD) who represent the shareholders
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