The relevance of assurance statements on CSR information to independent directors

Abstract

This paper aims to examine the relationship between board independence and the level of corporate social responsibility (CSR) disclosures and to check whether such a relationship is moderated by the existence of an assurance statement that increases the credibility and reliability of such information. Using an international sample of 780 companies from 2004 to 2010 as well as the GMM estimator methodology for panel data, our evidence supports the idea that independent directors show initial opposition to CSR disclosure practices, owing to concern for their career or reputation, because this reporting could lack credibility. However, the existence of an assurance statement moderates it in the sense that it protects directors from the reputation risks associated with potentially misleading CSR information.