How Do Remuneration Committees Affect Corporate Social Responsibility Disclosure? Empirical Evidence from an International Perspective

Inmaculada Bel-Oms,José Ramón Segarra-Moliner

doi:10.3390/su14020860

Abstract

The main goal of this study is to analyze whether the existence of remuneration committees tend to disclose more corporate social responsibility (CSR) information. In addition, we test the moderating role played by the proportion of independent directors on boards of directors with the relationship between the constitution of remuneration committees and CSR disclosure. Previous research does not appear to have addressed these questions. The research questions proposed are tested using an international sample of 28,610 listed companies, and we took into consideration information on industrial companies from the Middle East, developed Asian and Pacific countries, both emerging and developed European countries, Africa, Latin America and North America. These findings provide evidence that the existence of remuneration committees is more likely to disclose CSR information, and the existence of independent board members positively moderates the association between the existence of remuneration committees and CSR disclosure. We expand on earlier empirical literature concerning corporate governance and CSR issues.

Highlights

The relevant corporate scandals and the recent COVID-19 pandemic have led to a new unprecedented financial context
The level of the corporate social responsibility (CSR) information disclosed stands at an average of 19.90% of the 140 items tested in the CSR index
Our results show that the constitution of remuneration committees encourages the disclosure of CSR information

Summary

Introduction

The relevant corporate scandals and the recent COVID-19 pandemic have led to a new unprecedented financial context. In this regard, companies have shown interest in both financial performance and social and economic performance, causing corporate social responsibility (CSR) issues to be relevant to academics, investors, regulators and stakeholders. In a corporate governance environment, the corporate board body improves the transparency of the companies that are increasing the disclosure of CSR information; this is key in financial and non-financial decision-making [1]. Researchers have examined the relationship between CSR disclosure and some characteristics of the corporate governance field, such as board attributes [5], encouragement of corporate efficiency [6], and board composition [7], among others

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