Corporate Governance and Corporate Social Responsibility Disclosure: Evidence from the US Banking Sector

By Mohammad I. Jizi, Aly Salama, R. Dixon, Rebecca Stratling. Journal of Business Ethics, 2013

197 citations recorded by the source corpus.

There is a distinct lack of research into the relationship between corporate governance and corporate social responsibility (CSR) in the banking sector. This paper fills the gap in the literature by examining the impact of corporate governance, with particular reference to the role of board of directors, on the quality of CSR disclosure in US listed banks’ annual reports after the US sub-prime mortgage crisis. Using a sample of large US commercial banks for the period 2009–2011 and controlling for audit committee characteristics, board meeting frequency, and banks’ profitability, size and risk, we find evidence that board independence and board size, the two board characteristics usually associated with the protection of shareholder interests, are positively related to CSR disclosure. This indicates that, with regard to CSR disclosure, more independent boards of directors and larger boards are the internal corporate governance mechanisms which promote both shareholders’ and other stakeholders’ interests. Contrary to our expectations, CEO duality also impacts positively on CSR disclosure. From an agency-theoretical viewpoint, this suggests that powerful CEOs may promote transparency about banks’ CSR activities for their private benefits. While this could indicate that powerful CEOs are under particular pressure to appease stakeholders’ concerns that they might abuse their power by providing a high degree of CSR disclosure, it could also be a sign of managerial risk aversion or managers’ private reputational concerns.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/1cd50a22c53a138616a2b28db7ae926a8371054b

Citations in the corpus

• Corporate Board and Corporate Social Responsibility Assurance: Evidence from China (2016, unknown): “In this case, managers’ private interests are likely to have negative impacts on the way they engage in CSR activities (Jizi et al. 2014).”
• The Impact of Supervisory Board Composition on CSR Reporting. Evidence from the German Two-Tier System (2016, unknown): “Former managers on the supervisory board should not have any influence on CSRDS with respect to German companies, which is in line with prior research (e.g., [3,36,37,49,63,74–77]) but does not support H 3 .”
• Effect of Board Size and Duality on Corporate Social Responsibility: What has Improved in Corporate Governance in Asia? (2019, unknown): “Besides that Jizi et al. (2014) explained firms with larger boards are likely to disclose more CSR related information.”