The Association of Board Characteristics and Corporate Social Responsibility Disclosure Quality: Empirical Evidence from Pakistan

Faisal Hameed (), Mohammad Alfaraj and Khizar Hameed
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Faisal Hameed: Tasmanian School of Business and Economics, University of Tasmania, Hobart, TAS 7005, Australia
Mohammad Alfaraj: Department of Accounting, College of Business Studies, The Public Authority for Applied Education and Training, Shuwaikh 70654, Kuwait
Khizar Hameed: School of Information and Communication Technology, University of Tasmania, Hobart, TAS 7005, Australia

Sustainability, 2023, vol. 15, issue 24, 1-23

Abstract: Earlier research has shown that the makeup of the corporate board is a crucial predictor in meeting stakeholder accountability expectations through voluntary Corporate Social Responsibility (CSR) disclosure. Though scholars have identified substantial relationships between board composition and CSR disclosure, the majority of their focus has been on the ‘quantity’ of CSR disclosure rather than the ‘quality’. Therefore, the present study considers the association of board characteristics (such as gender diversity, independence, female chairperson or/and female CEO, and board size) and the quality of CSR disclosure of the top 100 Pakistan Stock Exchange (PSX)-listed companies. We conducted content analysis of secondary Corporate Governance (CG) and CSR data extracted from the annual reports of PSX-listed companies across ten industrial sectors from the period 2017 to 2018. Our empirical investigation through univariate and multiple regression analysis with ordinary least squares (OLS) techniques revealed that all the board characteristics potentially had a significant association to lower CSR disclosure quality. Using the 2SLS regression model, we addressed the endogeneity issue of board characteristics and found robust results. One of the important implications of our findings is that policymakers and regulators in developing countries like Pakistan should review the value of board qualities as outlined in CG principles and develop stronger mechanisms to improve numbers of female directors and nonexecutive directors’ independence. We acknowledge several research limitations, including the study time period and selected board characteristics. While our study has provided some understanding of the association of board characteristics with CSR disclosure quality of PSX-listed companies, several research gaps still need to be addressed. Future investigators should examine this association through the pre-COVID-19 and post-COVID-19 contexts and the inclusion of a systems theory perspective.

Keywords: board characteristics; gender diversity; board independence; female CEO; female chairperson; Corporate Social Responsibility (CSR); CSR disclosure quality (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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