•Assurance enhances the credibility and transparency of sustainability reporting.•The assurance demand is greater in countries at a stage with a strong legal system and culture and in companies ...experiencing strong pressure from their industry.•Sustainability assurance derives from coercive, normative and mimetic isomorphism.•Normative pressure is the institutional factor that exerts the greatest explanatory power in the assurance demand.
This study offers an opportunity to understand how country- and industry-specific effects may affect the decision to assure sustainability reports by identifying institutional pressures. Based on neo-institutional theory, the aim of this research is to highlight whether assurance derives from the coercive, normative and mimetic forces related to legal and cultural strength and the industry pressure for assurance, respectively. The panel data analysis of an international sample of 696 companies for the period 2007–2014 shows that voluntary assurance acts as a legitimization tool implemented by companies in response to normative, coercive and mimetic pressures; that is, companies operating in countries that have a greater legal system and cultural development, especially in industries that are greatly concerned about sustainability, are more likely to issue an assurance statement. Moreover, through a two-stage logit model, we respond to the question of which is the relevant institutional factor that causes voluntary assurance to be adopted. Specifically, we evidence that the normative factor is the one that exerts the greatest explanatory power in the assurance demand, followed by coercive pressure.
A bibliometric and bibliographic review was carried out to determine the effect that gender diversity in a board of directors has on the level of business commitment to sustainable development and ...stakeholder engagement through the dissemination of social and environmental information. The review included 89 articles published in the 66 most prestigious journals on business, management, ethics and environmental sciences according to the journal citation reports on the ISI Web of Knowledge. There has been spectacular growth in this line of research since 2016, led by Spanish and American researchers. There is currently a paradigm shift in the theoretical frameworks that support these investigations in examining the organisational and institutional environments that favour the advantages associated with the presence of women in bodies responsible for business strategy. However, the latest papers are based on the use of the Critical mass theory and moderating factors in order to explaining the divergence of results.
This paper aims to examine two closely related issues: first, the effect of the presence of female directors on boards on corporate social responsibility disclosure, focusing on the necessary ...critical mass of this minority group, and, second, the moderation of the human capital of board members—their background, skills, and experience—that could favor the intrinsic female directors' characteristics through the cognitive effect of equal board members. For an international sample of 9,744 firm‐year observations from 2007 to 2016, different panel data regressions are proposed. The findings of this study reveal a positive impact of gender board diversity on voluntary socially responsible disclosure by examining the presence of at least three women on the board—the critical mass. Moreover, the paper reports a greater effect when the board's background, skills, and experience are greater. As a supplemental analysis, the evidence shows that the female role does not remain when women achieve the position of chairperson; that is, female directors adopt a male stereotype regarding voluntary information disclosure when they are also the chairperson of the firm, independently of the human capital of the board members.
Abstract
Companies integrate Sustainable Development Goals (SDGs) in their sustainability reports for various reasons. This paper examines whether and how imitation and competitive pressures drive ...the SDG reporting in an international context. Drawing on institutional theory and employing data collected from 36 countries over 6 years (from 2015 to 2020), we found that, at the industry level, the extent of SDG reporting is associated with (a) the average extent of SDG reporting, (b) the extent of SDG reporting of the largest company, and (c) the average extent of SDG reporting of the companies awarded for their sustainability commitments. Additionally, we provide evidence of a positive effect exerted by competitive pressures, as well as evidence that the interaction between various forms of imitation and competition negatively affects SDG reporting. Our results are robust to different subsamples and have key implications for practitioners, regulators, and policymakers.
This article analyzes the relationship between corporate social responsibility (CSR) decoupling and financial market outcomes. CSR decoupling refers to the gap between CSR disclosure and CSR ...performance. More specifically, we analyze the effect of CSR decoupling on analysts’ forecast errors, cost of capital, and access to finance. We also examine the moderating effect of forecast errors on relationships between CSR decoupling and cost of capital and access to finance. For a sample of U.S. firms consisting of 7,681 firm-year observations for the period 2006–2015, our empirical evidence supports the idea that a wider gap results in higher analysts’ forecast errors, a greater cost of capital, and reduced access to finance. In addition, our results show that forecast errors enhance the effect of the CSR decoupling on cost of capital and access to financial resources. We also note that external monitoring, in the form of greater analysts’ coverage, reduces CSR decoupling.
Institutional investors show increasing interest in how companies align their corporate social responsibility strategies with the sustainable development goals (SDGs) proposed by the United Nations ...(UN). The information disclosed in this regard is essential to know and monitor business contribution to the 2030 Agenda. In this paper, we analyze the influence that institutional investors have on the adoption of the disclosure strategy established by UN and the Global Reporting Initiative (GRI)—GRI‐SDG Compass. The results obtained for a sample of 989 international companies, which prepare their sustainability reports following the GRI guidelines, show that ownership by foreign investors, pension funds, and “other” investors boosts the relevance of the information disclosed in relation to the 2030 Agenda. On the contrary, government, financial institutions, and cross holdings have no impact on the information systems developed.
Abstract
Knowledge of the initiatives that companies are promoting to curb climate change and the impacts resulting from these activities require the disclosure of relevant information that can be ...used by stakeholders in their decision‐making processes. The objective of this work is to complement previous studies by analysing the effect and type of relationship that exists between internal and market corporate governance mechanisms. We theoretically argue that business transparency related to climate change is explained both by climate governance and by the coverage of the company by financial analysts and that there may be both a complementary and substitutive relationship between the two mechanisms. The results obtained on a global climate governance score show the existence of a substitutive relationship, but the individualised consideration of the components of this score suggests a potential divergent relationship.
This paper investigates the impact of corporate social responsibility (CSR) disclosure quantity, quality, and external validation concerning assurance on capital constraints. We examine if these ...disclosure characteristics matter to the investors in the financial market, then they should be positively evaluated by financial market participants. More specifically, we study the effects of disclosure quantity, quality, and assurance on the access to financial resources for reporting firms. Analysis of data of an international sample for the period of 2007–2016 significantly supports the value relevance idea of CSR disclosure quality. We document that availability of more information about the firm's CSR initiatives eases the financial access. Furthermore, the quality and external assurance of CSR disclosure further strengthen the relationship between disclosure and access to finance. Our paper not only provides support for buying assurance but also argue for better assurance quality.
This paper seeks to explore how chief executive officer (CEO) ability influences the economic impact of corporate social responsibility strategic decisions. Currently, the evidence on the impact of ...corporate social responsibility on the value of the company is mixed; in this paper, we aim to observe the moderate role played by this particularity of the CEO in the relationship between socially responsible commitment and financial performance. Our results identify that the most able CEOs make investments in social and environmental practices that lead to greater financial performance; in contrast, the less able CEOs can overinvest or underinvest in an opportunistic way for personal benefit at shareholders' expense. In addition, the role that CEO ability plays in social and environmental strategies is particularly pertinent in munificent environments that foment managerial discretion; in these contexts, high managerial ability leads to investment in socially responsible performance, which benefits shareholders by alleviating moral hazard.
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