Independent Directors and CSR Disclosures: The moderating effects of proprietary costs

I. M. García‐Sánchez and J. Martínez‐Ferrero

Corporate Social Responsibility and Environmental Management, 2017, vol. 24, issue 1, 28-43

Abstract: The aim of this paper is two‐fold: (i) to evidence if the role of independent directors regarding the disclosure of corporate social responsibility (CSR) information is determined by the aim of protecting shareholders' value; and (ii) to highlight whether non‐executive directors only have incentives to disclose this information when it does not damage ownerships' interest, being a trade‐off between the benefits of reducing the information asymmetry in capital markets and the cost of aiding competitors by revealing proprietary information. From an international sample from 2004 to 2010, we proposed several Tobit regressions for panel data. This research evidences that independent directors show an initial opposition to CSR disclosure practices except in firms with a higher yearly cost of equity capital and lower proprietary costs. Moreover, this opposition is avoiding if there is an assurance statement that reduces their reputation risks associated with potential misleading CSR information. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment

Date: 2017
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https://doi.org/10.1002/csr.1389

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:24:y:2017:i:1:p:28-43

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