Is corporate governance a significant factor in corporate social responsibility disclosure? Insights from China
-
Author(s)Oleh PaskoLink to ORCID Index: https://orcid.org/0000-0002-6275-5885
,
Tetyana KharchenkoLink to ORCID Index: https://orcid.org/0000-0001-8967-4711
,
Oleksandr KovalenkoLink to ORCID Index: https://orcid.org/0000-0003-1043-6679
,
Viktoriia TkachenkoLink to ORCID Index: https://orcid.org/0000-0002-2924-4012
,
Oleksandr KutsLink to ORCID Index: https://orcid.org/0000-0002-2855-0659
-
DOIhttp://dx.doi.org/10.21511/imfi.21(1).2024.06
-
Article InfoVolume 21 2024, Issue #1, pp. 63-75
- 404 Views
-
101 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This comprehensive study delves into the intricate relationship between corporate governance and Corporate Social Responsibility Disclosure (CSRD) within the framework of China’s institutional landscape. By analyzing an extensive dataset comprising 35,435 firm-year observations from 3,889 A-share listed companies spanning the years 2006 to 2019, the research scrutinizes various governance mechanisms, including board size, independence, CEO duality, and ownership concentration.
The investigation affirms that larger boards and a higher proportion of independent directors exert a positive influence on CSRD. In contrast, a substantial shareholding ratio held by the largest shareholder proves to be a hindrance to the transparent disclosure of CSR initiatives. While the impact of CEO duality on CSRD is noted, the statistical significance of this relationship remains inconclusive.
These findings underscore the nuanced dynamics of governance and ownership structures in shaping CSR initiatives. The findings highlight the nuanced impact of governance and ownership structures on CSR initiatives, offering valuable insights for managers and policymakers navigating CSR strategies in China’s business landscape. The insights garnered from this study hold valuable implications for both corporate managers and policymakers navigating the landscape of CSR strategies within the unique contours of China’s business environment.
Acknowledgment
This paper is co-funded by the European Union through the European Education and Culture Executive Agency (EACEA) within the project “Embracing EU corporate social responsibility: challenges and opportunities of business-society bonds transformation in Ukraine” – 101094100 – EECORE – ERASMUS-JMO-2022-HEI-TCH-RSCH-UA-IBA / ERASMUS-JMO-2022-HEI-TCHRSCH https://eecore.snau.edu.ua/
Oleh PASKO expresses sincere gratitude for the support received from the Kirkland Research Program, generously provided by the Leaders of Change Foundation established by the Polish-American Freedom Foundation.
- Keywords
-
JEL Classification (Paper profile tab)G34, M14, M41
-
References49
-
Tables7
-
Figures0
-
- Table 1. Sustainability assurance reports by year
- Table 2. Sustainability reporting by industry
- Table 3. Definition of variables
- Table 4. Descriptive statistics
- Table 5. Correlation test
- Table 6. Regression results and robust test
- Table A1. Sample distribution
-
- Al Fadli, A., Sands, J., Jones, G., Beattie, C., & Pensiero, D. (2022). The influence of ownership structure on the extent of CSR reporting: An emerging market study. Business and Society Review, 127(3), 725-754.
- Ali, M., & Ayoko, O. B. (2020). The impact of board size on board demographic faultlines. Corporate Governance: The International Journal of Business in Society, 20(7), 1205-1222.
- Ali, W., Wilson, J., & Husnain, M. (2022). Determinants/Motivations of Corporate Social Responsibility Disclosure in Developing Economies: A Survey of the Extant Literature. Sustainability, 14(6), 3474.
- Alodat, A. Y., Salleh, Z., & Hashim, H. A. (2023). Corporate governance and sustainability disclosure: evidence from Jordan. Corporate Governance: The International Journal of Business in Society, 23(3), 587-606.
- Alrowwad, A. M., Alhasanat, K. A., Sokil, O., Halko, S., & Kucherkova, S. (2022). Sustainable transformation of accounting in agriculture. Agricultural and Resource Economics: International Scientific E-Journal, 8(2), 5-29.
- Aureli, S., Del Baldo, M., Lombardi, R., & Nappo, F. (2020). Nonfinancial reporting regulation and challenges in sustainability disclosure and corporate governance practices. Business Strategy and the Environment, 29(6), 2392-2403.
- Bian, H., Kuo, J., Pan, H., & Zhang, Z. (2023). The role of managerial ownership in dividend tunneling: Evidence from China. Corporate Governance: An International Review, 31(2), 307-333.
- Biswas, P. K., Mansi, M., & Pandey, R. (2018). Board composition, sustainability committee and corporate social and environmental performance in Australia. Pacific Accounting Review, 30(4), 517-540.
- Chen, C. J. ., Chen, S., & Su, X. (2001). Is accounting information value-relevant in the emerging Chinese stock market? Journal of International Accounting, Auditing and Taxation, 10(1), 1-22.
- Chintrakarn, P., Jiraporn, P., Kim, J.-C., & Kim, Y. S. (2016). The Effect of Corporate Governance on Corporate Social Responsibility. Asia-Pacific Journal of Financial Studies, 45(1), 102-123.
- Cullinan, C. P., Wang, F., Wang, P., & Zhang, J. (2012). Ownership structure and accounting conservatism in China. Journal of International Accounting, Auditing and Taxation, 21(1), 1-16.
- Diaz-Sarachaga, J. M. (2021). Shortcomings in reporting contributions towards the sustainable development goals. Corporate Social Responsibility and Environmental Management, 28(4), 1299-1312.
- Emma, G.-M., & Jennifer, M.-F. (2021). Is SDG reporting substantial or symbolic? An examination of controversial and environmentally sensitive industries. Journal of Cleaner Production, 298, 126781.
- Garas, S., & ElMassah, S. (2018). Corporate governance and corporate social responsibility disclosures. Critical Perspectives on International Business, 14(1), 2-26.
- Giannarakis, G. (2014). Corporate governance and financial characteristic effects on the extent of corporate social responsibility disclosure. Social Responsibility Journal, 10(4), 569-590.
- Habbash, M. (2016). Corporate governance and corporate social responsibility disclosure: evidence from Saudi Arabia. Social Responsibility Journal, 12(4), 740-754.
- Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of Accounting and Public Policy, 24(5), 391-430.
- Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance. Journal of Business Ethics, 149(2), 411-432.
- Jeroh, E. (2020). Firms Attributes, Corporate Social Responsibility Disclosure and the Financial Performance of Listed Companies in Nigeria. Asian Economic and Financial Review, 10(6), 727-743.
- Jizi, M. I., Salama, A., Dixon, R., & Stratling, R. (2014). Corporate Governance and Corporate Social Responsibility Disclosure: Evidence from the US Banking Sector. Journal of Business Ethics, 125(4), 601-615.
- Khan, A., Muttakin, M. B., & Siddiqui, J. (2013). Corporate Governance and Corporate Social Responsibility Disclosures: Evidence from an Emerging Economy. Journal of Business Ethics, 114(2), 207–223.
- Kılıç, M., Uyar, A., Kuzey, C., & Karaman, A. S. (2021). Drivers and consequences of sustainability committee existence? Evidence from the hospitality and tourism industry. International Journal of Hospitality Management, 92, 102753.
- Liao, L., Luo, L., & Tang, Q. (2015). Gender diversity, board independence, environmental committee and greenhouse gas disclosure. The British Accounting Review, 47(4), 409-424.
- Lin, Z. J., & Liu, M. (2009). The impact of corporate governance on auditor choice: Evidence from China. Journal of International Accounting, Auditing and Taxation, 18(1), 44-59.
- Mallin, C. A., & Michelon, G. (2011). Board reputation attributes and corporate social performance: an empirical investigation of the US Best Corporate Citizens. Accounting and Business Research, 41(2), 119-144.
- Manning, B., Braam, G., & Reimsbach, D. (2019). Corporate governance and sustainable business conduct-Effects of board monitoring effectiveness and stakeholder engagement on corporate sustainability performance and disclosure choices. Corporate Social Responsibility and Environmental Management, 26(2), 351-366.
- Michelon, G., & Parbonetti, A. (2012). The effect of corporate governance on sustainability disclosure. Journal of Management & Governance, 16(3), 477-509.
- Mio, C., Fasan, M., Marcon, C., & Panfilo, S. (2020). The predictive ability of legitimacy and agency theory after the implementation of the EU directive on non-financial information. Corporate Social Responsibility and Environmental Management, 27(6), 2465-2476.
- Naciti, V. (2019). Corporate governance and board of directors: The effect of a board composition on firm sustainability performance. Journal of Cleaner Production, 237, 117727.
- Ness, K. E., & Mirza, A. M. (1991). Corporate social disclosure: A note on a test of agency theory. The British Accounting Review, 23(3), 211-217.
- Nguyen, T. M. H., To, A. T., Phan, T. H., Ngo, N. P. D., & Ho, T. T. H. (2022). Ownership Concentration and Accounting Conservatism: The Moderating Role of Board Independence. Emerging Science Journal, 7(1), 90-101.
- Nwude, E. C., & Nwude, C. A. (2021). Board Structure and Corporate Social Responsibility: Evidence From Developing Economy. SAGE Open, 11(1), 215824402098854.
- Oh, W.-Y., Chang, Y. K., & Kim, T.-Y. (2018). Complementary or Substitutive Effects? Corporate Governance Mechanisms and Corporate Social Responsibility. Journal of Management, 44(7), 2716-2739.
- Pasko, O., Chen, F., Birchenko, N., & Ryzhikova, N. (2021). Corporate Governance Attributes and Accounting Conservatism: Evidence from China. Studies in Business and Economics, 16(3), 173-189.
- Pasko, O., Chen, F., Kuts, T., Sharko, I., & Ryzhikova, N. (2022). Sustainability reporting nexus to corporate governance in scholarly literature. Environmental Economics, 13(1), 61-78.
- Pasko, O., Chen, F., Proskurina, N., Mao, R., Gryn, V., & Pushkar, I. (2021). Are corporate social responsibility active firms less involved in earnings management? Empirical evidence from China. Business: Theory and Practice, 22(2), 504-516.
- Pasko, O., Lagodiienko, N., Kudlaieva, N., Riabenko, L., & Gerasymenko, N. (2022). Does corporate governance moderate the effect of corporate social responsibility on a firm’s financial performance? Problems and Perspectives in Management, 20(4), 588-601.
- Pasko, O., Zhang, L., Tuzhyk, K., Proskurina, N., & Gryn, V. (2021). Do sustainability reporting conduct and corporate governance attributes relate? Empirical evidence from China. Problems and Perspectives in Management, 19(4), 110-123.
- Pucheta-Martínez, M. C., & Gallego-Álvarez, I. (2018). Environmental reporting policy and corporate structures: An international analysis. Corporate Social Responsibility and Environmental Management, 25(5), 788-798.
- Raboshuk, A., Zakharov, D., Lehenchuk, S., Morgulets, O., & Hryhorevska, O. (2023). The relationship between corporate governance mechanisms and financial performance: The case of listed industrial companies in Oman. Investment Management and Financial Innovations, 20(2), 244-255.
- Searcy, C., & Buslovich, R. (2014). Corporate Perspectives on the Development and Use of Sustainability Reports. Journal of Business Ethics, 121(2), 149-169.
- Subramaniam, N., Akbar, S., Situ, H., Ji, S., & Parikh, N. (2023). Sustainable development goal reporting: Contrasting effects of institutional and organisational factors. Journal of Cleaner Production, 411, 137339.
- Syed, M. A., & Butt, S. A. (2017). Financial and non-financial determinants of corporate social responsibility: empirical evidence from Pakistan. Social Responsibility Journal, 13(4), 780-797.
- Tibiletti, V., Marchini, P. L., Furlotti, K., & Medioli, A. (2020). Does corporate governance matter in corporate social responsibility disclosure? Evidence from Italy in the “era of sustainability.” Corporate Social Responsibility and Environmental Management, csr.2097.
- Tyson, T., & Adams, C. A. (2019). Increasing the scope of assurance research: new lines of inquiry and novel theoretical perspectives. Sustainability Accounting, Management and Policy Journal, 11(2), 291-316.
- Uyar, A., Kilic, M., Koseoglu, M. A., Kuzey, C., & Karaman, A. S. (2020). The link among board characteristics, corporate social responsibility performance, and financial performance: Evidence from the hospitality and tourism industry. Tourism Management Perspectives, 35, 100714.
- Walls, J. L., Berrone, P., & Phan, P. H. (2012). Corporate governance and environmental performance: is there really a link? Strategic Management Journal, 33(8), 885-913.
- Zaid, M. A. A., Wang, M., & Abuhijleh, S. T. F. (2019). The effect of corporate governance practices on corporate social responsibility disclosure. Journal of Global Responsibility, 10(2), 134-160.
- Zaman, R., Nadeem, M., & Carvajal, M. (2020). Corporate governance and corporate social responsibility synergies: evidence from New Zealand. Meditari Accountancy Research, ahead-of-p (ahead-of-print), 2879-2892.
-
The role of accounting in sustainable development
Inna Makarenko ,
Alex Plastun
doi: http://dx.doi.org/10.21511/afc.01(2).2017.01
Accounting and Financial Control Volume 1, 2017 Issue #2 pp. 4-12 Views: 7574 Downloads: 4708 TO CITEIdeology of Sustainable Development and Sustainable Development Goals influence the transformation of business processes in the companies. Professional accountants are important part of this transformation. In this paper the role of accounting in Sustainable Development Goals achievement is discussed. Different approaches to structuring the role of professional accountants in Sustainable Development are investigated. Among them are types of roles that perform accountants, their professional functions, skills and competencies in the corporate environment. As the result a holistic vision of the role of accounting in sustainable development in the new economic conditions is provided.
-
The relationship between corporate social responsibility and earnings management: accounting for endogeneity
Hyunjung Choi , Byungchul Choi ,
Jungyoon Byun
doi: http://dx.doi.org/10.21511/imfi.15(4).2018.06
Investment Management and Financial Innovations Volume 15, 2018 Issue #4 pp. 69-84 Views: 4589 Downloads: 537 TO CITE АНОТАЦІЯThis study examines the relationship between corporate social responsibility (CSR) and earnings management after controlling for endogeneity of CSR. Using a sample of non-financial firms listed on Korean Securities Market between 2002 and 2010, this study finds that ignoring endogeneity biases the estimated relation between CSR and earnings management. Specifically, the results show that the negative and significant relation between CSR commitment and discretionary accruals reported in the previous studies becomes insignificant. However, the negative and significant relation between CSR commitment and real activities manipulation remains significant even when the endogeneity of CSR commitment is taken into account. Therefore, this study provides evidence that proactive CSR engagement significantly affects firm’s practice of real activities manipulation, while it does not affect its practice of discretionary accruals. These results indicate that CSR commitment leads managers to be more responsible in management of operational activities than in accruals management.
-
Does board composition have an impact on CSR reporting?
Patrick Velte
doi: http://dx.doi.org/10.21511/ppm.15(2).2017.02
Problems and Perspectives in Management Volume 15, 2017 Issue #2 pp. 19-35 Views: 4456 Downloads: 1718 TO CITE АНОТАЦІЯCorporate social responsibility (CSR) reporting plays a key role in management control, particularly in light of the increased demand for non-financial reporting after the financial crisis of 2008–2009. This literature review evaluates 47 empirical studies that concentrate on the influence of several board composition variables on the quantity and quality of CSR reporting. The author briefly introduces the research framework that underpins current empirical studies in this field. This is followed by a discussion of the main variables of board composition: (1) committees (audit and CSR committees), (2) board independence, (3) board expertise, (4) CEO duality, (5) board diversity (gender and foreign diversity), (6) board activity, and (7) board size. The author, then, summarizes the key findings, discusses the limitations of the existing research and offers useful recommendations for researchers, firm practice and regulators.
