The effect of environmental performance on sustainability reporting: A case of Indonesia

Corporate 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.

Drawing on the legitimacy theory framework, this study introduces an alternative means to spot “fuzzy reporting” signals as a way to detect greenwashing at the firm level. Its approach is based on the way the sustainability reporting process can mislead stakeholders after critical incidents take place. In order to do so, a single environmental incident, which took place in Colombia, is analyzed in light of what happened before, during and afterwards, with special emphasis on the corporate disclosure process performed by the company involved. Results obtained give support to the assumption that fuzzy reporting can be objectively detected not only through the analysis of annual sustainability reports, but also by tracking other forms of corporate messages when a specific concern is carefully followed. This study’s contribution is two-fold. First, it builds on the theoretical notions of greenwashing and fuzzy reporting by illustrating a practical and objective way to identify some deceiving corporate practices. Second, it empirically evaluates this approach in a sensitive context in order to obtain better illustration and prepare the groundwork for further studies.

The current research aims to explore the impact of corporate governance on the Saudi banking performance for the period of 2014–2017. Though many researchers tested the relationship of corporate governance and firm performance, globally as well as in Saudi Arabia, however, during the literature review, it was found that many excluded the banking industry. This study tries to fill the gap by looking exclusively at the Saudi banking industry. Firm performance is measured through return on assets, return on equity, and Tobin’s Q as the dependent variables. The corporate governance practices are measured through the board characteristics (size, meeting, number of committees, independence, foreign board membership), and an audit committee (size, meeting, independence) as the independent variables. Firm size and firm age are the controls. Panel data analysis was implemented, using both descriptive and multivariate analysis through multiple regression to investigate the governance practices and firm performance. The empirical findings demonstrate that board size, audit committee meeting and bank size have a positive impact on ROE, whereas board independence has a negative impact on ROE. Similarly, board size and bank size have a positive relationship with ROA and board meeting has a negative relationship with ROA. Further, board (size and independence) and bank size have a positive relationship with Tobin’s Q, whereas number of board committees and bank age have a negative relationship with Tobin’s Q. Finally, audit committee (size and independence) and foreign board membership have no impact on the bank performance.