Corporate governance: Does it matter for corporate social responsibility disclosure via website and social media by top listed UK companies?

Mohamed A K Basuony

doi:10.22495/cocv19i1art7

Abstract

This paper reports on the nature, extent, and determinants of online corporate social responsibility (CSR) disclosure practices among the top 350 companies listed in the London Stock Exchange (FTSE 350). This has been done through two-fold. First, the paper investigates the relationship between firm characteristics, board structure, and ownership structure with CSR information dissemination via social media. The results indicate that the company that has a high number of females on board has a significant effect on CSR and the product and service as a component of CSR. Moreover, the results reveal that the company with a high level of ownership concentration has an effect on community involvement, product and service, and environment. In addition, a company that has a high level of institutional ownership has an effect on the product and service. Finally, the company that has a high percentage of director ownership has an effect on the product and service. Second, the paper studies the effect of board structure and other control variables on the online CSR for the top listed UK firms. The dependent variables consist of a comprehensive index of disclosure and another four sub-indices which namely employees, community involvement, products & services, and environment. The results show that online CSR disclosure through the firms’ websites has been affected by board size, board diversity, audit type, profitability, leverage, firm age, and the sector in which the firm operates

Highlights

The rapid advancement of the Internet and the extensive use of it in all businesses has affected the methods and practices of corporate disclosure
This paper reports on the nature, extent, and determinants of online corporate social responsibility (CSR) disclosure practices among the top 350 companies listed in the London Stock Exchange (FTSE 350)
The results show that online CSR disclosure through the firms’ websites has been affected by board size, board diversity, audit type, profitability, leverage, firm age, and the sector in which the firm operates

Summary

Introduction

The rapid advancement of the Internet and the extensive use of it in all businesses has affected the methods and practices of corporate disclosure. Providing appropriate and timely disclosure leads to the reduction of information asymmetry and/or insider trading and leading to fairness and transparency between investors to achieve the overall goal of a robust financial system (Ashton, Graul, & Newton, 1989; Bamber, Barber, & Schoderbek, 1993; McLelland & Giroux, 2000; Mohamed, Basuony, & Badawi, 2013). Extent, and determinants of online disclosure have been previously studied and researched with all supportive evidence, limited and indecisive evidence has been provided to investigate the factors that derive and affect online disclosure. Most studies support the importance of firm size as one of the most important factors that affect online corporate disclosure Johnstone, & Warfield, 1999; Craven & Marston, 1999; Debreceny, Gray, & Rahman, 2002; Ettredge, Richardson, & Scholz, 2002; Fisher, Oyelere, & Laswad, 2004; Chan & Wickramasinghe, 2006; Mohamed & Basuony, 2015)

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