Abstract
Sustainability has become one of the key hubs around which the actions conducted by international economic operators revolve. This new perspective, perhaps better defined as “requirement”, given its specific weight in the global context, needs analysis of firms’ behaviours with regard to sustainability disclosure and the corporate governance (CG) mechanisms influencing the information released. Board of directors and CSR committee are critical CG mechanisms in that sense. This paper aims at investigating the relationship between specifics board characteristics and corporate social responsibility (CSR) disclosure. More specifically, the study investigates the relation between board independence and CSR disclosure, and how this relationship is moderated by the presence of a CSR committee. The analysis has been conducted on a sample of 119 Italian non-financial listed companies. The results obtained, using OLS regression method, show the existence of a positive and significant relationship between board independence and CSR disclosure. Moreover, the findings reveal that the presence of a CSR committee positively moderates the previous relationship, showing the complementary role played by board independence and CSR committee. These results have critical implications for boards, managers, regulators, and policymakers operating to define better corporate governance mechanisms, highlighting the importance of the joint effect of board independence and CSR committee in improving firms’ CSR disclosure practices. Our study also has relevant implications for researchers, evidencing the need to study the complementary effects of different CG mechanisms, rather than the single effect, on influencing CSR disclosure.
Highlights
corporate social responsibility (CSR) disclosure has become a strategic tool for enhancing companies’ image, consensus, trust, and social legitimacy and for corporate performance (Bushman & Smith, 2001)
The coefficient of Board independence (BoInd) is statistically significant at better than the 5 per cent level for explaining variations in the CSRDisc ( = 25.365, p < 0.10). This means that a larger number of independent directors, appointed by minorities, impacts positively on the level of CSR disclosure
The presence of a CSR committee positively moderates the relationship between BoInd and CSRDisc
Summary
CSR disclosure has become a strategic tool for enhancing companies’ image, consensus, trust, and social legitimacy and for corporate performance (Bushman & Smith, 2001). Corporate communication plays an important CG function and it can directly or indirectly affect performance through the accounting information released (Bushman & Smith, 2001). Independent directors, that is those directors who do not entertain and have not recently entertained, even indirectly, relations with the issuer or with subjects linked to the issuer, which may condition their autonomy of judgment, as provided by article 3 of Corporate Governance Code, seem to be more willing into enlarging the audience of companies’ stakeholders, as well as into encouraging companies to disclose more information about their social and environmental behaviours. In studying the determinants of CSR disclosure, it is important to investigate how different CG mechanisms interact each other in affecting corporate disclosure (Jain & Jamali, 2016; Chang, Oh, Park, & Jang, 2017; Oh, Chang, & Kim, 2018; El-Bassiouny & El-Bassiouny, 2019; Orazalin, 2019; Ullah, Muttakin, & Khan, 2019), in order to understand whether there are interdependencies between different CG mechanisms
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