Sustainability Reporting Practices in Bangladesh: Insights from Upper Echelons Theory

Abstract

The objective of this paper is to explore and understand how the top management team (TMT)'s, namely the CEO/ MD/ Board of Directors (BOD) and Executive Committee Members, observable attributes and cognitive traits influence the strategic choices, such as adopting the Sustainability Reporting (SR) practices in the organization. This qualitative study conducts 12 semi-structured in-depth interviews with the Top Management Team, including CEOs of publicly listed companies from different industries in Bangladesh. Using the Upper Echelons theory, the author provides an alternative theoretical lens to the motivations of SR practices in Bangladesh. There has been a number of studies on the relationship between CEO attributes and strategic decisions in management literature, primarily in the developed country context. However, the influence of CEO and TMT traits on strategic choices like SR practices in emerging countries is scant. The overall analysis reveals that cognitive bases like values and beliefs, philosophies, and vision of the top management team (TMT), as well as the observable traits like education and background, career track, functional and financial expertise, international exposure or orientation, views, and understanding of the SDGs and their disclosure influence the strategic choice of organizations like the adoption of SR practices. Demographic traits largely shape the values, views, and attitudes of the top management (Hambrick & Mason, 1984), which help them develop or change their perceptions and eventually influence their strategic choice. This paper contributes to sustainability reporting literature by providing an insight into how the top management characteristics shape the SR practices in an emerging economy like Bangladesh.