The Effect of Board Independence on the Sustainability Reporting Practices of Large U.S. Firms \

Abstract

As sustainability reporting becomes more commonplace, it is important to understand the factors that influence firms’ voluntary reporting decisions. This exploratory study examines whether board independence affects the sustainability reporting decisions of the 500 largest firms in the United States. We also investigate other factors that may be associated with sustainability reporting, including environmental performance and reputation. We find that<br />firms with a greater proportion of independent board members are: 1) more likely to publish standalone sustainability reports, and 2) more likely to publish higher quality sustainability reports. This paper contributes to prior literature that reports somewhat mixed results on the effect of board independence on voluntary disclosure.

Political Connection, Board Characteristics and Environmental Disclosure in Nigeria

“…In the case of governance attributes Herda et al (2013) found that board independence explains firm's sustainability reporting decision as well as the likelihood of issuing a higher quality sustainability report. Examining moderating relationship, Sun et al (2010) examined the moderating effect of board size and audit committee on the relationship between earnings management and corporate environmental disclosure.…”

“…Magness (2006) further asserts that there have been large inconsistencies between information disclosed an actual performance making the concept of environmental disclosures difficult to define. Also, various terminologies have been used in literature to refer to address environmental issues as it relates to financial reporting for example, environmental disclosure , environmental expenditures (Cho, Freedman, & Patten, 2012), environmental reporting (Buniamin, 2010), sustainability reporting (Herda, Taylor, & Winterbotham, 2013), environmental accounting (Donwa, 2011) and environmental management accounting (Sulaiman & Mokhtar, 2012) etc. Despite the shortcomings, various researchers have attempted to conceptualize the issue.…”

“…The literature on determinants of environmental disclosure have followed a trend from research that basically examined the role of firm specific characteristics for instance (Ahmad, Hassan, & Mohammad, 2003;Buniamin, 2010;Cho et al, 2012;Freedman & Jaggi, 2005;Magness, 2006;Salama, Dixon, & Habbash, 2012;Smith, Yahya, & Amiruddin, 2007) to studies that investigated the role of a variety of corporate governance attributes (Akrout & Othman, 2013;Choi, Lee, & Psaros, 2013;Fodio & Oba, 2012;Herda et al, 2013;Sun, Salama, Hussainey, & Habbash, 2010).…”

The Effect of Country‐Level Investor Protection on the Voluntary Assurance of Sustainability Reports

“…Herda et al. () find that U.S. firms with a greater proportion of independent board members and firms with better environmental performance are more likely to publish sustainability reports.…”

Integrated Reporting Narratives: The Case of an Industry Leader

“…Researchers have applied various theoretical and empirical frameworks to study various dimensions of CSR. Some argue that slack resources enable firms to go for voluntary CSR disclosure [1], while others relate such initiatives with reputational risk [2] and a company's value [3]. The literature focusing on the determinants of CSR disclosure argues that size, profitability, and a desire for legitimacy are the main determining factors of CSR disclosure (see for review [4]).…”