Corporate governance and corporate social responsibility disclosures : evidence from an emerging economy
TL;DR: In this paper, the authors examine the relationship between corporate governance and the extent of corporate social responsibility (CSR) disclosures in the annual reports of Bangladeshi companies and find that corporate governance attributes play a vital role in ensuring organisational legitimacy through CSR disclosures.
Abstract: We examine the relationship between corporate governance and the extent of corporate social responsibility (CSR) disclosures in the annual reports of Bangladeshi companies. A legitimacy theory framework is adopted to understand the extent to which corporate governance characteristics, such as managerial ownership, public ownership, foreign ownership, board independence, CEO duality and presence of audit committee influence organisational response to various stakeholder groups. Our results suggest that although CSR disclosures generally have a negative association with managerial ownership, such relationship becomes significant and positive for export-oriented industries. We also find public ownership, foreign ownership, board independence and presence of audit committee to have positive significant impacts on CSR disclosures. However, we fail to find any significant impact of CEO duality. Thus, our results suggest that pressures exerted by external stakeholder groups and corporate governance mechanisms involving independent outsiders may allay some concerns relating to family influence on CSR disclosure practices. Overall, our study implies that corporate governance attributes play a vital role in ensuring organisational legitimacy through CSR disclosures. The findings of our study should be of interest to regulators and policy makers in countries which share similar corporate ownership and regulatory structures.
Citations
More filters
TL;DR: In this article, a survey and content analysis of 76 empirical research articles was conducted to understand the factors driving corporate social responsibility disclosure in both developed and developing countries. And they found that firm characteristics such as company size, industry sector, profitability, and corporate governance mechanisms predominantly appear to drive the CSR reporting agenda.
Abstract: Based on a survey and content analysis of 76 empirical research articles, this article reviews the factors driving Corporate Social Responsibility (CSR) disclosure in both developed and developing countries. We find that firm characteristics such as company size, industry sector, profitability, and corporate governance mechanisms predominantly appear to drive the CSR reporting agenda. Furthermore, political, social, and cultural factors influence the CSR disclosure agenda. We find crucial differences between the determinants of CSR disclosure in developed and developing countries. In developed countries, the concerns of specific stakeholders, for example, regulators, shareholders, creditors, investors, environmentalists and the media are considered very important in disclosing CSR information. In developing countries, CSR reporting is more heavily influenced by the external forces/powerful stakeholders such as international buyers, foreign investors, international media and international regulatory bodies (e.g. the World Bank). Furthermore, in contrast to developed countries, firms in developing countries perceive relatively little pressure from the public with regards to CSR disclosure. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment
532 citations
TL;DR: In this article, the authors present a multilevel review of the literature on CSR in developing countries and highlight the key differentiators and nuanced CSR-related considerations that qualify it as a distinctive field of study.
Abstract: Given the rising interest in corporate social responsibility (CSR) globally, its local expressions are as varied as they are increasingly visible in both developed and developing countries. This paper presents a multilevel review of the literature on CSR in developing countries and highlights the key differentiators and nuanced CSR-related considerations that qualify it as a distinctive field of study. This review entails a content analysis of 452 articles spanning two-and-a-half decades (1990–2015). Based on this comprehensive review, the authors identify the key differentiating attributes of the literature on CSR in developing countries in relation to depictions of how CSR is conceived or ‘CSR Thinking’ and depictions of how CSR is practiced and implemented or ‘CSR Doing’. The authors synthesize from there five key themes that capture the main aspects of variation in this literature, namely: (1) complex institutional antecedents within the national business system (NBS); (2) complex macro-level antecedents outside the NBS; (3) the salience of multiple actors involved in formal and informal governance; (4) hybridized and other nuanced forms of CSR expressions; and (5) varied scope of developmental and detrimental CSR consequences. The paper concludes by accentuating how the nuanced forms of CSR in the developing world are invariably contextualized and locally shaped by multi-level factors and actors embedded within wider formal and informal governance systems.
503 citations
TL;DR: In this paper, the authors draw on insights from theories in the management and corporate governance literature to develop a theoretical model that makes explicit the links between a firm's corporate social responsibility (CSR) related board attributes, its board CSR strategy, and its environmental and social performance.
Abstract: In this paper, we draw on insights from theories in the management and corporate governance literature to develop a theoretical model that makes explicit the links between a firm’s corporate social responsibility (CSR) related board attributes, its board CSR strategy, and its environmental and social performance. We then test the model using structural equation modeling approach. We find that the greater the CSR orientation of the board (as measured by the board’s independence, gender diversity, and financial expertise on audit committee), the more proactive and comprehensive the firm’s CSR strategy, and the higher its environmental and social performance. Moreover, we find this link to be endogenous and self-reinforcing, with superior CSR performers tending to further strengthen their board CSR orientation. This result while positive is also suggestive of the widening of the gap between the leads and laggards in CSR. Therefore, the question arises as to how ‘leaders’ are using their superior CSR competencies seen by many scholars as a source of corporate (at times unfair) competitive advantage. Stakeholders of corporations therefore need to be cognizant of this aspect of CSR when evaluating a firm’s CSR activities. Policy makers also need to be cognizant of these concerns when designing regulation in this field.
364 citations
TL;DR: In this article, the association between ESG disclosure and diversity of the board of directors in Italian listed companies was investigated, and the results indicated that firm's CSR disclosure is associated with independent director and committee CSR.
Abstract: This study investigates the association between environmental, social, and governance (ESG) disclosure and diversity of the board of directors (BoD) in Italian listed companies. Diversity of BoD in terms of gender diversity, CSR committees, board average, and independent directors are examined as to their influence on voluntary ESG disclosure. This rating is highly relevant to managers and investors considering ESG issues in their decision-making process. The factors that drive or hinder ESG disclosure are gaining importance. Despite the relevance of the topic, in Italy there is a scarce amount of literature regarding diversity in the BoD. The data set includes ESG data for more than 54 Italian companies for the period 2011–2014. The results indicate that firm's CSR disclosure is associated with independent director and committee CSR. In addition, women on BoDs is negatively correlated while the age of the board is not significant. Based on this study, shareholders and policymakers will have a deeper knowledge on the significant roles that board diversity is playing as a determinant of ESG disclosure. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment
314 citations
TL;DR: A systematic multi-level review of recent literature to evaluate the impact of corporate governance mechanisms (CG) at the institutional, firm, group, and individual levels on firm level corporate social responsibility (CSR) outcomes is provided in this article.
Abstract: Manuscript Type
Review
Research Question/Issue
This study provides a systematic multi-level review of recent literature to evaluate the impact of corporate governance mechanisms (CG) at the institutional, firm, group, and individual levels on firm level corporate social responsibility (CSR) outcomes. We offer critical reflections on the current state of this literature and provide concrete suggestions to guide future research.
Research Findings/Insights
Focusing on peer-reviewed articles from 2000 to 2015, the review compiles the evidence on offer pertaining to the most relevant CG mechanisms and their influence on CSR outcomes. At the institutional level, we focus on formal and informal institutional mechanisms, and at the firm level, we analyze the different types of firm owners. At the group level, we segregate our analysis into board structures, director social capital and resource networks, and directors' demographic diversity. At the individual level, our review covers CEOs' demography and socio-psychological characteristics. We map the effect of these mechanisms on firms' CSR outcomes.
Theoretical/Academic Implications
We recommend that greater scholarly attention needs to be accorded to disaggregating variables and yet comprehending how multiple configurations of CG mechanisms interact and combine to impact firms' CSR behavior. We suggest that CG-CSR research should employ a multi-theoretical lens and apply sophisticated qualitative and quantitative methods to enable a deeper and finer-grained analysis of the CG systems and their influence on CSR. Finally, we call for cross-cultural research to capture the context sensitivities typical of both CG and CSR constructs.
Practitioner/Policy Implications
Our review suggests that for structural changes and reforms within firms to be successful, they need to be complemented by changes to the institutional makeup of the context in which firms function to encourage/induce substantive changes in corporate responsible behaviors.
293 citations
References
More filters
TL;DR: In this paper, a general formula (α) of which a special case is the Kuder-Richardson coefficient of equivalence is shown to be the mean of all split-half coefficients resulting from different splittings of a test, therefore an estimate of the correlation between two random samples of items from a universe of items like those in the test.
Abstract: A general formula (α) of which a special case is the Kuder-Richardson coefficient of equivalence is shown to be the mean of all split-half coefficients resulting from different splittings of a test. α is therefore an estimate of the correlation between two random samples of items from a universe of items like those in the test. α is found to be an appropriate index of equivalence and, except for very short tests, of the first-factor concentration in the test. Tests divisible into distinct subtests should be so divided before using the formula. The index
$$\bar r_{ij} $$
, derived from α, is shown to be an index of inter-item homogeneity. Comparison is made to the Guttman and Loevinger approaches. Parallel split coefficients are shown to be unnecessary for tests of common types. In designing tests, maximum interpretability of scores is obtained by increasing the first-factor concentration in any separately-scored subtest and avoiding substantial group-factor clusters within a subtest. Scalability is not a requisite.
37,235 citations
TL;DR: In this paper, the authors argue that rational actors make their organizations increasingly similar as they try to change them, and describe three isomorphic processes-coercive, mimetic, and normative.
Abstract: What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.
32,981 citations
Journal Article•
9,237 citations
TL;DR: The authors applied the convergent insights of institutional and resource dependence perspectives to the prediction of strategic responses to institutional processes, and proposed a typology of strategies that vary in active organizational resistance from passive conformity to proactive manipulation.
Abstract: This article applies the convergent insights of institutional and resource dependence perspectives to the prediction of strategic responses to institutional processes. The article offers a typology of strategic responses that vary in active organizational resistance from passive conformity to proactive manipulation. Ten institutional factors are hypothesized to predict the occurrence of the alternative proposed strategies and the degree of organizational conformity or resistance to institutional pressures.
7,595 citations
Book•
01 Jan 1983
TL;DR: In this article, a simple linear regression with one predictor variable variable is proposed for time series data, where the predictor variable is a linear regression model with a single predictor variable and the regression model is a combination of linear regression and regression with multiple predictors.
Abstract: Part1 Simple Linear Regression 1Linear Regression with One Predictor Variable 2Inferences in Regression and Correlation Analysis 3Diagnostics and Remedial Measures 4 Simultaneous Inferences and Other Topics in Regression Analysis 5Matrix Approach to Simple Linear Regression Analysis Part 2Multiple Linear Regression 6Multiple Regression I 7 Multiple Regression II 8Building the Regression Model I: Models for Quantitative and Qualitative Predictors 9 Building the Regression Model II: Model Selection and Validation 10Building the Regression Model III: Diagnostics 11Remedial Measures and Alternative Regression Techniques 12Autocorrelation in Time Series Data Part 3Nonlinear Regression 13Introduction to Nonlinear Regression and Neural Networks 14Logistic Regression, Poisson Regression, and Generalized Linear Models
5,099 citations