Corporate Governance mechanisms as drivers that enhance the credibility and usefulness of CSR disclosure

Abstract

The aim of this paper is to examine what kinds of CG mechanisms (institutional, firm or group level) are driving getting an Assurance or a GRI application level, like CSR disclosure decisions linked with credibility and usefulness of the information disclosed, in the particular context of energy companies.Previous evidence is scarce and does not jointly consider all level of CG mechanisms.Our sample is composed by 176 energy companies worldwide which currently report about CSR through a sustainability report. On the basis of our findings, we could support the idea that the credibility of the CSR report of the utilities companies will be greater if the company listed in a Relation-Based country has an Assurance report. In addition, those companies that have a concentrated ownership and the fewer insiders sitting in the BoD present more probabilities of having an Assurance. Moreover, the usefulness of the CSR information provided by this kind of firms will be higher, the greater the efficiency of the BoD will be.The enhancement of the credibility and the usefulness of the information reported is essential for companies involved in this sector due to the frequent claim of window-dressing behaviours.

Which Corporate Governance Mechanisms Drive CSR Disclosure Practices in Emerging Countries?

“…That means that he/she is identified with the company and in a long-term relationship, so this encourages transparency and accountability. As to the group-level CG measures, we underscore that most CSR reporting practices are positively influenced by board size [15,16,18,106], although some authors have pointed out the existence of a U-shaped relationship [17]. Regarding the presence of independent directors, most of the literature has suggested a non-significant impact of this variable [70], although some research has presented a positive influence [69,86].…”

“…If the results obtained from this research are compared with the empirical evidence in developed countries, we highlight that most evidence suggests a positive impact of the existence of a reference shareholder on specific CSR reporting practices (assurance [18], GRI [59]). That means that he/she is identified with the company and in a long-term relationship, so this encourages transparency and accountability.…”

“…Ownership structure influences CSR disclosure in developing countries [60], although the empirical evidence is scarce, mostly due to the lack of data available to carry out this research. Most of this evidence is focused on relation-based countries and the results report differences in the sign of the effect depending on the kind of ownership structure analyzed (i.e., family ownership [61] and managerial ownership [18], among others). Ownership concentration was analyzed in Chinese companies [62,63] and the findings were contrary to these results.…”

How to Lead the Board of Directors to a Sustainable Development of Business with the CSR Committees

“…Industry is suggested by the existing literature as a driver for CSR [73], considering the different level of social and environmental risk related to different business sectors. Jo and Na [74] suggest a negative relation between CSR engagement and firm risk over the long term.…”

The assurance of sustainability reports and their impact on stock market prices

“…1 This may be due to the pressure placed on firms by the different stakeholders to produce and publish this type of information. This pressure is much more direct in countries where firms have been forced to do this through legal provisions (Miras and Di Pietra 2018).…”