Corporate governance and financial characteristic effects on the extent of corporate social responsibility disclosure

This study aims to investigate the relationship between corporate governance and financial characteristics and the extent of corporate social responsibility (CSR) disclosure in the USA. These corporate governance and financial characteristics are the board meetings, average age of board members, presence of women on the board, the board’s size, chief executive officer duality, financial leverage, profitability, company’s size, board composition and board’s commitment to CSR.

The sample consists of 100 companies from the Fortune 500 list for 2011. The environmental, social and governance disclosure score calculated by Bloomberg is used as a proxy for the extent of CSR disclosure. A multiple linear regression was incorporated to investigate the association of corporate characteristics with CSR disclosure.

Results indicate that the company’s size, the board commitment to CSR and profitability were found to be positively associated with the extent of CSR disclosure, while financial leverage is related negatively with the extent of CSR disclosure.

The research is based only on the presence or absence of CSR items in CSR disclosure, and it ignores the quality dimension which can lead to misinterpretation. The results should not be generalized as the sample was based on US companies for 2011.

The study assists stakeholders to identify US companies through the extent of CSR disclosures which contributes to the understanding of determinants of CSR disclosure to improve the implementation of disclosure guidelines.