Corporate social responsibility disclosure and information asymmetry: does boardroom attributes matter?

Abstract

PurposeThe current study aims to investigate the relation between corporate social responsibility (CSR) and information asymmetry, as well as the moderating effect of board characteristics (gender diversity, size and independence) on this relationship.Design/methodology/approachThis paper uses a panel data regression analysis with the system generalized method of moments (SGMM) estimator of nonfinancial French firms included in the SBF 120 index. The environmental and social disclosure scores are collected from the Bloomberg database, while financial data are collected from the FactSet database.FindingsThe empirical results demonstrate that environmental disclosure has a positive impact on the level of information asymmetry, while social disclosure has no effect on the information environment. Gender diversity and board independence negatively impact the opacity index, while board size has a positive effect. The presence of women in board composition has a substitution effect on the relationship between environmental disclosure and information asymmetry. There is no moderating effect of board size on the association between CSR disclosure and information asymmetry. However, the proportion of independent female directors and board independence operates as substitutes to social disclosure on reducing information asymmetry.Research limitations/implicationsAlthough the models include the most common control variables used in the literature, they omit some variables. Second, the results should be interpreted with caution and should not be generalized to the entire stock market since the sample is based on large French companies.Practical implicationsThe results of this study may be of interest to managers, investors and French market authorities since France is characterized by highly developed laws and reforms in the area of CSR. In addition, the paper leads to a better understanding of how women on the board, in particular, independent female directors, affect the relationship between CSR disclosure and information asymmetry. This could be of interest to French authorities, which has encouraged the appointment of women through the adoption of the Copé–Zimmermann law.Originality/valueFirst, to the best of the authors' knowledge, this is the first study to explore the moderating effect of board characteristics on the relationship between CSR and information asymmetry. Second, unlike previous studies using individual proxies to measure information asymmetry, the authors favor the opacity index of Anderson et al. (2009). They calculate this index by including a fifth individual measure, namely, share price volatility. The opacity index better describes the information environment of companies than individual measures since it reflects the perceptions of investors and analysts together.

Peran Pengungkapan Lingkungan Dalam Meningkatkan Harga Saham

“…Penelitian-penelitian di Luar Negeri seperti Afrika, China, India, Eropa, Inggris, maupun Thailand menunjukkan bahwa pengungkapan lingkungan sebagai sinyal positif bagi investor yang dibuktikan dengan tingginya harga saham (De Klerk & De Villiers, 2012;De Klerk et al, 2015;Ender & Brinckmann, 2019;Flammer, 2013;Ji et al, 2020;Kansal et al, 2014;Suttipun & Yordudom, 2022). Berbeda ditunjukkan oleh Hamrouni et al, (2022) bahwa harga saham perusahaan Vollkswagen turun sebesar 20% karena kasus skandal emisi yang melanda perusahaan tersebut. Berdasarkan ketidakkonsitenan hasil penelitian terdahulu maka penelitian ini bertujuan untuk menguji peran pengungkapan lingkungan dalam meningkatkan harga saham di Indonesia terutama semua perusahaan go public yang menerbitkan informasi lingkungan kecuali bank dan Lembaga keuangan.…”

The effect of corporate governance, corporate social responsibility and information asymmetry on the value of Indonesian-listed firms

“…This has the potential to impose agency costs, leading to declining firm value (Tang and Chang, 2015; Rehman et al , 2022). CSR disclosure mitigates the information asymmetry between managers and shareholders (Cho et al , 2013; Cui et al , 2018; Hamrouni et al , 2022). This motivates firms to disclose greater amounts of information, thereby allowing external investors to better assess firms’ future value-creation potential of firms (McGuire et al , 1988; Hamrouni et al , 2022).…”

Female leadership and financial reporting quality in Egypt

“…The purpose is to explore the effectiveness of female directors as a monitor tool to reduce information asymmetry. The justification of such an assumption is based on the special abilities that women possess and their capabilities to reduce information asymmetries and conflicts of interest between the board of directors and different internal and external stakeholder groups (Hamrouni et al. , 2021; Usman et al.…”

“…The purpose is to explore the effectiveness of female directors as a monitor tool to reduce information asymmetry. The justification of such an assumption is based on the special abilities that women possess and their capabilities to reduce information asymmetries and conflicts of interest between the board of directors and different internal and external stakeholder groups (Hamrouni et al, 2021;Usman et al, 2019;Velte, 2017). Gaynor et al (2016) define higher quality financial reports as those that are more complete, neutral and free from error and provide more useful predictive or confirmatory information about the company's underlying economic position and performance.…”