Corporate governance and corporate social responsibility disclosure: evidence from Pakistan

Abstract

PurposeThis paper aims to investigate whether there is any change in corporate social responsibility (CSR) disclosure in Pakistani companies after the introduction of CSR voluntary guidelines in 2013 by Securities and Exchange Commission of Pakistan (SECP) and determine the effect of corporate governance (CG) elements on CSR disclosure.Design/methodology/approachContent analysis was applied to measure CSR disclosure from annual and sustainability reports of 50 companies from eight different sectors from 2010 to 2014. Paired-samples t-test was applied to examine the difference in CSR disclosure. Regression analysis was used to examine the relationships between CG elements and CSR disclosure.FindingsPaired-samples t-test shows an increase in the extent of CSR disclosure after the introduction of CSR voluntary guidelines in 2013. The one-way ANOVA test reveals that the extent of CSR disclosure is different across various sectors. Multiple regression results prove that independent directors, women directors and board size positively affect the extent of CSR disclosure.Practical implicationsSECP should enforce medium-sized firms to start producing CSR reports. Voluntary guidelines of 2013 moderately improved CSR reporting. Therefore, enforcement of the SECP rule of independent directors may enhance the extent of CSR disclosure.Originality/valueThis study is the first to examine the effect of CSR voluntary guidelines issued by SECP in 2013 and CG elements on CSR disclosure in Pakistan.