The joint effect of board independence and CSR committee on CSR disclosure: Evidence from Italian listed companies

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.