The IUP Journal of Corporate Governance
Board Characteristics, Ownership Structure and Corporate Social Responsibility Disclosures: Evidence from ADX-Listed Companies

Article Details
Pub. Date : Apr, 2020
Product Name : The IUP Journal of Corporate Governance
Product Type : Article
Product Code : IJCG10420
Author Name :Mohamed Chakib Kolsi, Riham Muqattash
Availability : YES
Subject/Domain : Management
Download Format : PDF Format
No. of Pages : 25



Corporate Social Responsibility (CSR) concept has gained great attention both in the media and academic community in the last few decades. This paper sheds light on the relationship between social disclosures and corporate governance mechanisms, mainly ownership structure and board of directors characteristics. The results derived, using a sample of sixty-one firms listed on ADX for the period 2010-2014 and computing an eight-item index, viz., Environment (ENV), Human Resources (HR), Customer-Supplier relationship (CS), Product-Service quality (PS), Community Services (COMS), Corporate Governance (CG), Energy saving (ENG), Finance and Investment (FI) disclosures, are conclusive and show that corporate governance mechanisms have significant impact on CSR disclosures. Mainly, managerial ownership, independent directors, governmental ownership, audit committee size, firm size and leverage positively impact the level of CSR disclosures. In contrast, CEO duality, block holders and the proportion of capital owned by the first shareholder negatively impact the extent of CSR disclosures. Finally, board size, board gender diversity, foreign and listing status and firm profitability have no significant impact on the extent of CSR disclosures. The results remain unchanged to additional robustness checks such as alternative estimation method and CSR disclosure proxy. The findings help in guiding regulators in issuing new standards on social and environmental disclosures.


The Agency model (Jensen and Meckling, 1976) has gained great acceptance among managers, practitioners and the scientific community. However, this model does not acknowledge any basic responsibility of managers towards external stakeholders beyond shareholders. Corporate Social Responsibility (CSR), however, involves at least some responsibility towards external parties other than shareholders (Sacconi, 2012, p. 1). Special attention has been granted to CSR issues in the developed markets. However, studies related to CSR disclosures in emerging countries are not deeply clarified due to lack of awareness of the importance of firms' social and environmental performance associated with the lack of clear regulations and laws (Menassa, 2010). Studies related to CSR in emerging markets shed light mainly on the determinants of CSR disclosures (Roberts, 1992; Naser et al., 2006; Menassa, 2010; Gamerschlag et al., 2011; and Naser and Hassan, 2013). Others focused only on the relationship with firm performance (Haryono and Iskandar, 2015). In this study, the authors examine the impact of corporate governance mechanism, mainly the board of directors characteristics and the ownership structure, on the extent of CSR disclosures on a sample of ADX-listed companies.

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