Moderating effect of CSR on the Direction and Strength of the Relationship between Corporate Governance Mechanism and Integrated Reporting Quality: An Evidence from India

Abstract

Grounding upon the perspective of agency theory, the current study intends to inspect the association between Governance Practices of Companies, in the form of board attributes and Quality of Integrated Reporting among selected listed Indian companies. Further the study also aims to evaluate, whether the association between the board’s attributes and IR quality is moderated by the Corporate Social Responsibility (CSR). For the purpose of testing hypothesis, the study has considered a sample of 25 top Indian corporates of energy industry listed in the BSE-500 group. The period of the study extends from 2017-18 to 2021-22. Pooled OLS regression analysis is used to test the impact of corporate governance practices on the IR quality and evaluate if CSR moderates the strength and direction of their relationship. To ascertain the IR disclosure score of the sample companies, a checklist is developed built on IR Framework devised by the International Integrated Reporting Council (IIRC) and the technique of visual content analysis is applied. Further board size, firm size, leverage, ROE, ROA, Market to Book value ratio are considered as the control variables to strengthen the panel data model. The study found that board characteristics had a positive relationship with IRQ. It is also revealed that CSR positively moderates the association between Corporate Governance mechanism and IRQ. The significance of Corporate Governance in the process of managerial decision making is the major theoretical development of this research.