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Assurance of corporate social responsibility reports: Examining the role of internal and external corporate governance mechanisms
Author(s) -
GarcíaSánchez IsabelMaría,
Hussain Nazim,
Khan SanaAkbar,
MartínezFerrero Jennifer
Publication year - 2022
Publication title -
corporate social responsibility and environmental management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.519
H-Index - 73
eISSN - 1535-3966
pISSN - 1535-3958
DOI - 10.1002/csr.2186
Subject(s) - corporate governance , accounting , business , credibility , corporate social responsibility , independence (probability theory) , diversity (politics) , sample (material) , public relations , finance , political science , statistics , chemistry , mathematics , chromatography , law
This article examines the effects of various internal (board independence, gender diversity, and specialized sustainability committee) and external (analysts' coverage and institutional ownership) corporate governance mechanisms on firms' decision to purchase external assurance for their corporate social responsibility (CSR) report. Using an international sample, we show that board diversity, the existence of a CSR committee, analysts' coverage, and institutional investors increase the probability of assuring a CSR report, while board independence decreases it. The findings further suggest that several configurations of these mechanisms complement each other in improving the credibility of nonfinancial disclosure through assurance. However, other configurations do not work in tandem, supporting the existence of substitution effects. Overall, bundling various governance mechanisms effectively could be more useful in formulating and implementing a corporate strategy than individual mechanisms.