Abstract
The nexus between corporate governance (CG) and corporate social responsibility (CSR) is well researched and established in literature. However, the debate regarding the influence corporate governance exerts on corporate social responsibility engagements and reporting is still inconclusive. This study investigates the impact of CG mechanisms on CSR disclosure among the listed companies in Botswana. The study employs content analysis to extract relevant data from annual reports for period 2014 to 2017. Comprehensiveness of descriptions of entity engagements in community involvement, human resources, environment and product and consumers is used as dependent variable while board size, board meeting frequency, ratio of independent directors to board size, the size of audit committee and its meeting frequency are used as independent variables. Company size and Return on assets are controlling variables. Least square regression method is used to analyse the effect of CG attributes on CSR disclosures. Comprehensiveness of disclosure is measured by sentences of reporting, availability of comparative figures, presence of photos and quantified CSR descriptions. The results suggest that the board size, board independence and audit committee meetings frequency have a statistically significant positive influence on corporate social responsibility reports. Company size also reflected a significant positive association with CSR disclosure. These results have implications on composition and structure of the board of directors which should be accorded due attention as the firms work to improve responsiveness to their stakeholders’ demands through CSR investments and disclosures. Keywords: Corporate governance, Corporate social responsibility, Disclosure, Agency theory, Legitimacy theory, Botswana DOI : 10.7176/RJFA/10-20-05 Publication date :October 31 st 2019
Highlights
1.1 Corporate Social Responsibility and Corporate Social Responsibility Disclosure Corporate social responsibility (CSR) is concerned with redirecting the business’ attention from the traditional sole motive of profit-maximization for shareholders to a broader focus embracing the interests of both the shareholders and other stakeholders. Akinleye and Adedayo (2018) note that CSR is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for both the firms and their stakeholders
The results reveal that public ownership, foreign ownership, board independence and existence of audit committee have a positive significant effect on disclosure of corporate social responsibility
(2014) and Barakat, Pérez and Ariza (2015), the results suggest that CSR disclosure is mainly driven by board size with standardised beta of 60.7% and p-value of 0.000
Summary
1.1 Corporate Social Responsibility and Corporate Social Responsibility Disclosure Corporate social responsibility (CSR) is concerned with redirecting the business’ attention from the traditional sole motive of profit-maximization for shareholders (creating value for shareholders) to a broader focus embracing the interests of both the shareholders and other stakeholders. Akinleye and Adedayo (2018) note that CSR is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for both the firms and their stakeholders. Akinleye and Adedayo (2018) note that CSR is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for both the firms and their stakeholders. Through CSR activities businesses show their commitment to contribute towards solving common social and environmental problems. Hohnen (2007) describes CSR as the way firms integrate social, environmental and economic concerns into their values, culture, decision making, strategy and operations in a transparent and accountable manner and thereby establish better practices within the firm, create wealth and improve society. Engaging in CSR in its various forms has become a win-win situation whereby socially and environmentally conscious stakeholders (consumers and employees) remain attracted to the company thereby improving company’s performance. From its genesis the key philosophy of CSR has been a voluntary involvement to align the business activities with society expectations (Benabou & Tirole, 2010)
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