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Social Responsibility Journal
Corporate governance and financial characteristic effects on the extent of corporate social responsibility
disclosure
Grigoris Giannarakis,
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Grigoris Giannarakis, (2014) "Corporate governance and financial characteristic effects on the extent of corporate
social responsibility disclosure", Social Responsibility Journal, Vol. 10 Issue: 4, pp.569-590, https://doi.org/10.1108/
SRJ-02-2013-0008
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Corporate governance and financial
characteristic effects on the extent of
corporate social responsibility disclosure
Grigoris Giannarakis
Grigoris Giannarakis is a Abstract

Lecturer based at Purpose – This study aims to investigate the relationship between corporate governance and financial
Department of Financial characteristics and the extent of corporate social responsibility (CSR) disclosure in the USA. These
Applications, corporate governance and financial characteristics are the board meetings, average age of board
Technological Education 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.
Institute (TEI) of West
Design/methodology/approach – The sample consists of 100 companies from the Fortune 500 list for
Macedonia, Kozani,
2011. The environmental, social and governance disclosure score calculated by Bloomberg is used as
Greece.
a proxy for the extent of CSR disclosure. A multiple linear regression was incorporated to investigate the
association of corporate characteristics with CSR disclosure.
Findings – 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.
Research limitations/implications – 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.
Originality/value – 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.
Keywords Corporate governance, Disclosure, Determinants, Corporate social responsibility
Paper type Research paper
1. Introduction
This study investigates the relationship of corporate governance and financial
characteristics on the extent of CSR disclosure in the USA. Bhimani and Soonawalla (2005)
noted that the concepts of corporate governance and CSR are two sides of the same coin,
while Esa and Mohd Ghazali (2012, p. 293) pointed out that both “CSR and corporate
governance also stress on the importance of achieving long-term value which in turn will
assist in promoting a business continued acceptance and existence”. The concept of CSR
and CSR disclosure have emerged together, ensuring better governance (Adam and
Shavit, 2009; Perrini, 2005). In addition, Shavit and Adam (2011) stated that the need for
disclosure and transparency can insure better governance, and the choice of investment
on CSR criteria may increase the long-term owner value; however, in the short term, the
gains may lessen for investors. Baldarelli and Gigli (2011) noted that the development of
CSR initiatives concerns the corporate governance level and can contribute to persistent
profitability and superior performance.
Regarding the definition Figure of CSR, it “[. . .] means not only fulfilling legal
expectations, but also going beyond compliance and investing ‘more’ into human
capital, the environment and the relations with stakeholders” (Commission of the
European Communities, 2001, p. 6). As far as CSR reporting is concerned, an
DOI 10.1108/SRJ-02-2013-0008 VOL. 10 NO. 4 2014, pp. 569-590, © Emerald Group Publishing Limited, ISSN 1747-1117 SOCIAL RESPONSIBILITY JOURNAL PAGE 569
increasing number of companies have realized the importance of social awareness of
their corporate operations. Thus, companies have developed different communication
tools to publish their CSR initiatives, with the most important method being social
disclosure (Gray et al., 1996; Birth and Illia, 2008; CSR Europe, 2000a, 2000b). CSR
disclosure is referred to as “a public report by companies to provide internal and
external stakeholders with a picture of the corporate position and activities on
economic, environmental and social dimensions” (World Business Council for
Sustainable Development, 2002).
The main motive for the publishing of sustainable disclosure is to legitimize the companies’
operations, thus, justifying its continuous existence (Guthrie and Parker, 1989; Daub, 2007)
and gain higher levels of citizen trust. According to Mathews (1995), reputation
management and brand protection can be considered as important motives for the
elaboration of CSR disclosure (Kolk, 2005), while Baldarelli and Gigli (2011) described the
concept of corporate responsibility as an intrinsic component of reputation. An increasing
number of investors are showing interest in CSR development and are adopting CSR
policies which lead to rapid changes in stock market investments (Cowton, 1999; Cox et al.,
2004). Adam and Shavit (2008) pointed out that a rating-based method assessing CSR can
probably be an incentive to companies excluded from Socially Responsible Investments

(SRI) indices to invest in CSR initiatives. Therefore, when companies are ranked publicly by
SRI index criteria, the market forces an incentive on companies to invest in improving their
SRI index ranking.
Different approaches have been developed to assess CSR performance. Some of these
are single and multiple indicators, expert assessments, surveys of managers and content
of corporate disclosures (Turker, 2009; Maignan and Ferrell, 2004). Gelb and Strawser
(2001) showed that companies which implement CSR initiatives provide high levels of CSR
disclosure performance. CSR disclosure can be used as a proxy for CSR implementation;
however, this does not necessarily mean that companies provide the actual performance
but the one that the company wants to present to stakeholders. It can be used as an
indication for the company’s intention (Ullmann, 1985; Alon et al., 2010; McGuire et al.,
1988; Daub, 2007).
According to EIRIS assessment of sustainability performance in over 2,000 large-cap
global companies, no USA company is in the top 10 and only 9 per cent of them are
assessed with high sustainable performance (EIRIS, 2012) because in the USA, companies
develop CSR disclosure on a voluntary basis (Rodríguez and LeMaster, 2007; Tschopp,
2005). They tend to publish more CSR initiatives for corporate discretion than their
competitors, as the US market gives more incentives and opportunities to companies to
assume comparatively explicit responsibility (Matten and Moon, 2008; Gamerschlag et al.,
2010). In addition, the European companies that are cross-listed on the US Stock Exchange
provide more non-financial information, pointing the importance of the business
environment on reporting (Bancel and Mittoo, 2001). In 2011, 83 per cent of the US
companies participated in CSR reporting compared to 74 per cent in 2008 (KPMG, 2011);
however, only 140 of the US companies in 2009 and 140 US companies in 2010 developed
CSR disclosures according to the Global Reporting Initiatives (GRI) (2012) requirements.
The growing popularity of SRI in the USA in 1980s (Escrig-Olmedo et al., 2010) has
contributed to the formation of SRI indices such as, Dow Jones Sustainability Index and
KLD index. They have integrated the dimension of reporting into their assessment
performance procedure based on international CSR reporting standards such as GRI,
promoting business transparency (Escrig-Olmedo et al., 2010). In the USA, SRI assets are
a significant part of the financial market, reaching $3.74 trillion (Voorhes et al., 2012). Thus,
the companies are motivated to integrate CSR disclosure initiatives to be assessed by SRI
indices and attract the interest of sustainable and responsible investors.
The aim of this study is to investigate the association between corporate characteristics
and the extent of CSR disclosure by companies listed on Fortune 500 list, for 2011. More
PAGE 570 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 4 2014

specifically, ten corporate characteristics are used, namely, the number of board meetings,
average age of the board of directors, presence of women on board, board size, chief
executive officer (CEO) duality, financial leverage, profitability, size, board composition and
board’s commitment to CSR.
While previous empirical studies were based on content analysis depending on selected
criteria to assess CSR disclosures, websites and other reporting means, this paper
incorporates the environmental, social and governmental (ESG) disclosure score index
calculated by Bloomberg as a proxy for corporate willingness to publish CSR initiatives and
intention for CSR initiatives. Regression analysis is used to test hypotheses that link the
extent of CSR disclosure and specific-related corporate determinants using Eviews
software. This study adds to the international literature by providing evidence of corporate
characteristics that affect the extent of CSR disclosure to improve the development of CSR
disclosure guidelines.
The paper is organized as follows. Section 2 presents a recent literature review of the
relationship of corporate characteristics and the extent of CSR disclosure, while in Section
3, the hypothesis development is recorded. Section 4 describes the methodological
approach along with a discussion of the results in Section 5. Finally, in Section 6, some
conclusions are stated along with suggestions for further research in Section 7.
2. Literature review
This section presents a review of recent academic literature as regards the effects of
corporate governance and financial characteristics on the extent of CSR disclosure.
Previously published empirical studies assess CSR disclosure on a quantitative basis,
neglecting the quality approach, probably, because companies are able to select the
way by which they present their information, increasing the difficulty of assessing the
CSR disclosure quality (Morhardt et al., 2002). Companies publicize CSR information
with the intention of enhancing public respect or to legitimize their business operations
(Deegan, 2002). In general, three main approaches exist regarding the type of CSR/
non-financial disclosures that are examined in relation to corporate governance
characteristics. The first approach concerns disclosures which incorporate multiple
dimensions of the CSR concept. The second approach extends the first approach by
comparing the effects of corporate characteristics with different types of disclosures,
such as environmental and social ones to record differences between those
disclosures. The last one focusses only on a specific dimension of CSR, the
environmental disclosure.
Gamerschlag et al. (2010) incorporated GRI guidelines as a data source for the creation of
CSR disclosure index through a content analysis methodology by 130 German companies.
An ordinary least squares regression was applied to assess the association between
corporate characteristics and the extent of CSR disclosure. It was found that visibility,
relationship with the USA stakeholders and shareholder structure were positively related to
the extent of CSR disclosures, while profitability is an important determinant only to
environmental disclosure.
Rahman et al. (2011) assessed the impact of size, age, profitability and leverage on the
level of CSR disclosure. The study was based on 44 government-linked companies listed
on Bursa Malaysia for 2005 and 2006. The CSR disclosure was divided into four main
sub-categories, namely, human resource, community, marketplace and environment. The
development of CSR index was based on a quantity procedure, while a number of
sentences were chosen as a unit analysis. Using a multiple regression model, only
corporate size was found significant to the extent of CSR disclosure for both years.
Khan (2010) investigated the annual extent of CSR disclosures and corporate governance
elements of listed private commercial banks in Bangladesh for the period of 2007-2008
VOL. 10 NO. 4 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 571

using content analysis. The CSR disclosure index was based on 60 items which belonged
to six areas, namely:
1. contribution to health sector;

2. education sector;
3. action for natural disaster;
4. other donations;
5. activities for employees; and
6. environmental issues.
The results of multiple regressions indicated that size, profitability, non-executive directors
and existence of foreign nationalities on the board are positively associated to the extent of
CSR disclosure.
Siregar and Bachtiar (2010) used a content analysis on six areas, namely, environment,
energy, labour, product, community and others, modifying the Haniffa and Cooke (2005)
CSR checklist to develop two types of independent variables. The first type concerned
corporate social disclosure index, while the second one concerned corporate social
disclosure length. The study consisted of 87 public firms listed in the Indonesian Stock
Exchange, in 2003. It was found that the determinants of board and firm size had a positive
association with the extent of CSR disclosure.
Hossain and Reaz (2007) focussed on the companies listed on the Bombay Stock Exchange
and the National Stock Exchange for 2002-2003. The CSR disclosure index for each company
was based on a dichotomous and unweighted approach for the 65 CSR items information
which was categorized into nine CSR disclosure dimensions. The ordinary least square
regression model was selected to investigate the association between corporate
characteristics and CSR disclosure. Two explanatory variables were found statistically related
to the level of CSR disclosure, namely, company size and assets in-place.
Said et al. (2009) examined the relationship between corporate governance characteristics
and CSR disclosure of 150 listed Malaysian companies. Based on the previous academic
studies, a content analysis procedure was developed for the creation of CSR disclosure
index for each company taking into account annual disclosures and corporate websites. A
hierarchical regression analysis was used to develop the two separate models. The first
model investigated the relation of the extent of CSR disclosure to corporate size and
profitability, while the second model introduced eight governance characteristics as control
variables. Regarding the results of the first model, both size and profitability were positively
related to the level of CSR disclosure, while in the second model, only two control variables
were significantly related, namely, government ownership and audit committee.
Reverte (2009) developed a CSR disclosure index in accordance with observation of CSR
requirements. It publishes annually a report of CSR disclosures initiatives for Spanish
companies listed in IBEX35 index. A linear regression was used to analyze the relationship
between explanatory variables and the extent of CSR disclosure. CSR disclosure index is
higher for large companies, higher media exposure and industry environmental sensitive
companies.
Tagesson et al. (2009) examined the extent and the content of social disclosure information
on official corporations’ websites by 169 companies on Stockholm Stock Exchange and all
State-owned corporations for 2007. The findings showed a positive association between
size and profitability with the content of social disclosure information on corporate websites
and state-owned corporations which disclosed more social information on their websites
than privately owned corporations, while there were significant differences between
industry and corporate characteristics.

Branco and Rodrigues (2008) assessed the relationship of a number of corporate
specifications to the extent of CSR disclosure based on annual disclosure and disclosure of
corporate websites, and examined if there were differences or similarities between the two
different types of voluntary disclosures. A content analysis was established and elaborated to
measure the level of CSR disclosure focussing on 49 companies listed on Portuguese Stock
Exchange. According to the multiple regression analysis, the dimension of corporate size has
a positive coefficient which suggests that larger companies include more information on both
types of disclosures; media exposure is positively associated only with annual disclosure;
financial leverage has a negative relation website disclosure; while the dimension of profitability
is positively related only to products and consumers disclosure.
Ho and Taylor (2007) analyzed the relationship of six corporate governance and financial
characteristics on total CSR disclosure index comparing 50 of the largest US and Japan
companies. Results revealed that the extent of CSR disclosure was associated with the
corporate size, profitability, liquidity, industry type and the country’s profile, with the
Japanese companies presenting higher extent of CSR disclosure than the US companies.
Furthermore, slight differences existed among the sub-dimensions of CSR disclosure.
Mohd Ghazali (2007) focussed on the influence of ownership structure to the extent of CSR
disclosure of companies listed in Brusa Malaysia Composite Index. The extent of CSR
disclosure index was based on 22 items of information equally weighted. Two corporate
characteristics were positively related: the first characteristic concerned the corporate size,
while the second one concerned companies in which government was a substantial
shareholder. These companies tended to publish more CSR information in their
disclosures. It also showed that director ownership was negatively related to the extent of
CSR disclosure.
Haniffa and Cooke (2005) examined culture and corporate governance characteristics on
social disclosures for 139 non-financial companies listed on the Kuala Lumpur Stock
Exchange of Malaysia for 1996 and 2002. Two different types of dependent variables were
used: corporate social disclosure index and corporate social disclosure length. Both
indices were based on the content analysis approach, whereas their criteria depended on
previous research studies. It was found that boards dominated by Malay directors,
composition of non-executive directors, chairperson with multiple directorships, ownership
by foreign shareholders, size and profitability and multiple listing related positively to the
two types of CSR disclosures both in 1996 and in 2002. Table I presents the most important
aspects of the literature review mentioned above.
Recent literature reviews have been conducted both on developed and developing
countries; however, empirical studies regarding the USA companies are limited. The size
of the samples ranges from 30 to 169 companies incorporating stock exchange indices,
probably because they are more possible to integrate CSR policies than others, and it is
easier to find corporate governance and financial data through annual corporate
disclosures and Internet-based databases. Regarding the significance of explanatory
variables, various corporate governance and financial characteristics are considered with
the most vital being firm size, profitability and industry profile. It is obvious that few things
have been recorded as regards the effects of corporate governance and financial
characteristics on the extent of CSR disclosure by the US companies. The global financial
crisis has led companies to reassess their policies and strategies to survive; thus, it is
important to investigate the reaction of these companies in business operations, such as
CSR which is related to corporate economic performance, stakeholders’ expectations and
global sustainability.
3. Hypothesis development
Figure 1 presents the research model on which the hypothesis development is based.
In total, ten hypotheses are elaborated to justify the extent of CSR disclosure variables,

Table I Main aspects of the recent literature review
Significance explanatory
Authors Country Sample Size Year of reference variables
Gamerschlag Germany 130 largest companies (DAX,

2008 considering four reporting Visibility
et al. (2010) MDAX and SDAX) periods between 2005 and Relationship to US stakeholders
2008 Shareholder structure
Rahman et al. Malaysia 44 government-linked companies Period 2005-2006 Firm size
(2011) listed on Bursa Malaysia
Siregar and Portugal 87 public firms listed in the 2003 Firm size
Bachtiar (2010) Indonesian Stock Exchange Board size
Khan (2010) Bangladesh 30 private commercial banks Period 2007-2008 Firm size
listed on the Dhaka Stock Profitability
Exchange Non-executive directors
Foreign nationalities on the
board
Hossain and India 38 listed banking companies in Period 2002-2003 Firm size
Reaz (2007) Bombay Stock Exchange and the Assets in-place
National Stock Exchange
Tagesson et al. Sweden 169 companies listed in 2006 Firm size
(2009) Stockholm Stock Exchange and Profitability

all State-owned corporations
Said et al. Malaysia 150 non-financial companies 2006 Government ownership
(2009) listed on the main board of Bursa Audit committee
Malaysia
Reverte (2009) Spanish 35 companies listed on IBEX35 Period 2005-2006 Firm size
index Media exposure
Industry environmental
sensitivity
Branco and Portugal 49 companies listed on Euronext 2003 (CSR disclosure)-2004 Firm size
Rodrigues –Lisbon (CSR disclosure on Internet) Financial leverage
(2008) Media exposure
Ho and Taylor US, Japan 100 largest Us and Japan 2003 Firm size
(2007) Companies Profitability
Liquidity
Industry
Country profile
Mohd Ghazali Malaysia 87 non-financial companies listed 2001 Firm size
(2007) on Bursa Malaysia Director ownership
Government ownership
Haniffa and Malaysia 139 non-financial companies 1996, 2002 Firm Size
Cooke (2005) listed on the Kuala Lumpur Stock Profitability
Exchange Multiple listing
Industry
Figure 1 Research model

such as the number of board meetings, the board’s average age, the percentage of
women on board, the board’s size, CEO duality, the financial leverage, the profitability,
the total assets, the percentage of independent directors on board and the board’s
commitment to CSR are taken into account as explanatory variables so as to justify the
extent of CSR disclosure. In each case, an expectation is formed based on prior
empirical studies.
3.1 Company’s size

Based on empirical evidence, the company’s size is typically used as a proxy for its
visibility (Brammer and Millington, 2006; Branco and Rodrigues, 2008). Large companies
tend to be more visible and receive attention from external stakeholder groups; thus, they
publish more CSR information to legitimize their initiatives (Cowen, 1987). Cormier and
Gordon (2001) pointed out that the large companies produce CSR disclosures for
accountability purposes as explained by the legitimacy theory. In general, the company’s
size is relevant, reflecting the extent of social commitment (Teoh and Thong, 1984). In
addition, larger size companies have more resources available for social initiatives, while
the cost of social responsibility and disclosure cost for larger firms is smaller than small or
medium firms (Siregar and Bachtiar, 2010; Werther and Chandler, 2005; Graafland et al.,
2003; Ho and Taylor, 2007). Mohd Ghazali (2007) mentioned that larger companies use the
annual CSR disclosures as a mean to manipulate the political sphere and enhance a firm’s
reputation (Hooghiemstra, 2000), whilst Meznar and Nigh (1995) emphasized that large
companies are more powerful and thus, more resistant to stakeholders’ pressures. Roberts
(1992), on the other hand, did not find a significant correlation between size and social
disclosure in the USA.
Different indicators have been used as a proxy for a company’s size, such as the
number of employees (Tagesson et al., 2009), the market value of equity (Ho and
Taylor, 2007), turnover (Adams et al., 1998; Tagesson et al., 2009), the market
capitalization (Mohd Ghazali, 2007; Reverte, 2009) and the total asset (Brammer and
Pavelin, 2004; Haniffa and Cooke, 2005; Siregar and Bachtiar, 2010; Hossain and Reaz,
2007; Khan, 2010; Reverte, 2009; Rahman et al., 2011). Previous empirical studies
revealed a positive relationship between the extent of CSR disclosure and a company’s
size measured by total assets (Eilbert and Parket, 1973; Trotman and Bradley, 1981;
Haniffa and Cooke, 2005; Branco and Rodrigues, 2008; Gamerschlag et al., 2010;
Hossain and Reaz, 2007; Khan, 2010; Reverte, 2009; Rahman et al., 2011). Thus, the
underlying assumption is:
H1. There is positive association between a company’s size and the extent of CSR
disclosure.
3.2 Financial leverage

The level of a corporate financial leverage can be used as a proxy for creditor power (Liu
and Anbumozhi, 2009). The effect of the financial leverage on the extent of CSR disclosure
seems to be a controversial subject with varying results among explanatory studies. Branco
and Rodrigues (2008) found that the financial leverage of Portuguese companies has a
negative relationship to the extent of CSR information on websites. In addition, Ho and
Taylor (2007) concluded that the extent of CSR disclosure is higher for lower liquidity
companies. Andrikopoulos and Kriklani (2012) discovered that the companies with high
levels of financial leverage tend to reduce the extent of disclosures because the
preparation of voluntary disclosure is a costly procedure. Brammer and Pavelin (2008)
stated that low financial leverage ensures that creditors will exert less pressure to constrain
the managers’ discretion over CSR initiatives, such as disclosure, which can be indirectly
linked to financial performance. Chow and Wong-Boren (1987) could not find the
predictability of financial leverage on the extent of voluntary disclosure in Mexican stock
companies. Siregar and Bachtiar (2010) found that the financial leverage of Indonesian

companies has no effect on the extent of CSR disclosure. Regarding the previous studies,
the following hypothesis is tested:
H2. The financial leverage has a negative association with the extent of CSR disclosure.
3.3 Profitability
Giner (1997) explored three theories to justify the positive relationship between profitability
and CSR disclosure. Agency theory suggested that profitable companies provide more
detailed information to support their own positions and compensation arrangements.
Signalling theory supported that owners provided good news to avoid the undervaluation
of their shareholder’s value, and the Political Process theory stated that profitable
companies provide more information in disclosures to justify their profits.
As far as the empirical studies are concerned, Haniffa and Cooke (2005) claimed that
the profitable companies provide more CSR information to legitimize their existence. The
positive relationship between profitability and the extent of CSR disclosure is due to the
management’s freedom and flexibility to publish more CSR initiatives to shareholders.
Gamerschlag et al. (2010) found a positive relationship between profitability and higher
environmental disclosures but no association with social disclosures. Tagesson et al.

(2009) discovered that if a company is profitable, there is a positive relationship between
the extent of CSR disclosure and profitability and the companies can afford the cost for
CSR disclosure.
On the contrary, Ho and Taylor (2007) indicated that less profitable companies tend to
disclose more information regarding social and environmental disclosures to demonstrate
their contribution to society. Siregar and Bachtiar (2010) found that profitable companies
devote more financial resources to social initiatives; however, the empirical results showed
no significant influence between profitability and CSR disclosure, probably because CSR
initiatives are costly without any direct benefits. In addition, Mohd Ghazali (2007), Rahman
et al. (2011), Patten (1991), McNally et al. (1982) and Reverte (2009) could not find a strong
statistical significance of profitability to the extent of CRS disclosure. Even if the empirical
results are contradictory, it is hypothesized, in this study, that profitability affects positively
the extent of CSR disclosure:
H3. There is a positive relationship between profitability and the extent of CSR
disclosure.
3.4 CEO duality

CEO duality is the situation where the same person is the CEO and the board’s chairperson
(Rechner and Dalton, 1991). An important dimension in the corporate governance literature
is the effect of CEO duality, used as a proxy for the board’s leadership structure, on the
extent of CSR disclosure. Chaganti et al. (1985) found that CEO and the chairman’s board
position should be held by a different individual to ensure the independence of the board
of directors. It is thought that a chairman who does not hold another office duty tends to be
involved in special planning assignments, such as CSR, while a chairman who has various
offices roles may not have the time to confront different functions effectively (Stieglitz and
Janger, 1963). Elsayed (2007) pointed out that higher levels of corporate performance can
be achieved when the executive manager has the chairman’s board responsibilities
because fewer conflicts can occur.
Through empirical studies, Michelon and Parbonetti (2012) pointed out that CEO duality
reduces overall accountability both to internal and external stakeholders. Cheng and
Courtenay (2006) found out that CEO duality is not associated with the extent of voluntary
disclosure focussing on companies from the Singapore Exchange and Said et al. (2009)
rejecting the positive effect of CSR duality on the extent of CSR disclosure at Malaysian
sample companies. In addition, the work of Gul and Leung (2004) demonstrated a negative
relationship of CEO duality to the extent of voluntary disclosure. Li et al. (2010)

demonstrated that firms communicating more CSR tend to have separate individuals for the
CEO and chairman’s board positions taking into account a sample of Egyptian listed firms.
As CEO duality creates clear leadership for the company, it is obvious that important
business operations will be affected, such as CSR disclosure. The hypothesis is:
H4. CEO duality has a negative association with the extent of CSR disclosure.
3.5 Board size

Lee and Chen (2011) stated that the board’s size is considered as a crucial aspect of
corporate government, and it can be used as a proxy for effective monitoring, while Golden
and Zajac (2001) pointed out the potential effect of the board’s size on strategic change in
organizations. In literature, the effect of a board’s size on CSR disclosure is controversial.
Jensen (1993) found that the small number of members in a board is a determinant factor
for the corporate performance and when the members are more than seven or eight, it is
less likely to function effectively. Regarding resource dependency theory, Abeysekera
(2010) mentioned that a larger board brings diverse and vital resources and faces global
challenges more effectively and efficiently. Siregar and Bachtiar (2010) showed positive
and non-linear relations between the board’s size and the extent of CSR disclosure. Large
boards are able to monitor business operations better than smaller ones; however, too
large a board makes the process of monitoring ineffective. Said et al. (2009) suggested a
negative relationship between a board’s size and the extent of CSR disclosure, as the large
board’s size leads to ineffective coordination in communication and decision-making;
however, their results show a positive relation. Esa and Mohd Ghazali (2011) showed that
a board’s size is positively associated with the extent of CSR disclosure in a sample of
Malaysian listed companies. This was because more productive discussions were held and
hence, more investments were made on those activities. This study hypothesizes that firms
with larger boards provide more CSR information:
H5. Large board size has a positive association with the extent of CSR disclosure.
3.6 Board meetings

The board meeting frequency can be used as a proxy for the board diligence and the level
of monitoring the activities delivered (Vafeas, 1999; Laksmana, 2008). Frequent board
meetings give the opportunity to the members to share more information, allowing better
workload distribution and committee assignments (Laksmana, 2008). In addition, the
increased number of board meetings is considered an inexpensive way to increase the firm
value. An opposite point of view states that the board time consumes the limited time of the
directors and does not advocate for the meaningful exchange of ideas among them
(Vafeas, 1999; Lipton and Lorsch, 1992). The board meeting frequency is examined, for the
first time, in relation to the extent of CSR disclosure; thus, there is no evidence in academic
literature as far as concerns the board meeting frequency and CSR disclosure. Companies
face a number of constraints to develop a CSR policy and strategy in relation to their
business operations, such as lack of the appropriate business culture, difficulty in the
establishment of visible and measurable CSR, contradictory stakeholders’ expectations,
lack of the appropriate personnel, etc. (European Multistakeholder Forum on CSR, 2004;
Tencati et al., 2004). Thus, a Board with increased meeting frequency enables to manage
better business operations, leading to greater attention on CSR information both to internal
and external stakeholders for its initiatives:
H6. There is a positive relationship between the number of board meetings and the
extent of CSR disclosure.
3.7 Board’s average age

The average age of board members can be used as proxies for the director’s business
experience (Anderson et al., 2004). For the first time, the role of the board’s age is
investigated about the extent of CSR disclosure, while in the literature, the determinant of

the board’s age has been analyzed in comparison with the firm performance (Muth and
Donaldson, 1998). As younger directors have received their education more recently, they
tend to be more knowledgeable on new administration tools. However, older directors may
exhibit a conservative bias and better judgement (Bantel and Jackson, 1989); thus, they
may avoid all the possible risks (Vroom and Bernd, 1971) deriving from adopting new styles
of business administration. In this study, it is hypothesized that younger members of
directors may be more willing to incorporate new orientations of innovative business
operations, such as CSR than older executives (Child, 1975). The hypothesis is:
H7. There is a negative relationship between the average age of board members and
the extent of CSR disclosure.
3.8 Women on board

The relationship of gender composition has been related with the financial performance,
but no evidence exists regarding the CSR disclosure. Traditionally, boards comprise only
male directors; however, the presence of women members increases board independence
(Ujunwa, 2012; Rose, 2007; Carter et al., 2003). The presence of women on boards could
add unique and different perspectives, experiences and work styles in relation to male
directors. Communication styles tend to be more participative and process-oriented with
female members (Daily and Dalton, 2003). Williams (2003) demonstrated that there is a link
between the percentage of women on boards and firm philanthropy in the areas of
community service and the arts. It is pointed out that the motives are unclear as to why
women may be more charitable than men. Regarding women’s presence in the board and
CSR, Wang and Coffey (1992) stated that women and other minority directors seemed to
be more corporate social performance oriented, thus, their presence tended to have a
positive effect on philanthropy. It was showed that women board members played a
substantial role in corporate reputation (Bear et al., 2010) by engaging with CSR. On the
contrary, Khan (2010) did not find a significant relationship between the women
representation in the board and CSR reporting by the banks. Thus, based on the above
studies, the hypothesis is:
H8. Increased women’s percentage in the board is positively related to the extent of
CSR disclosure.
3.9 Board composition

Board composition can be defined as the proportion of outside directors to the total number
of the board, making a distinction; thus, between executive and non-executive members
(Hossain and Reaz, 2007). On the one hand, the role of non-executive directors is vital for
the formation of CSR policy as they review and refine the strategic initiative (Hill, 1995;
Stiles, 2001). Tricker (1984) found that non-executive directors are used as check and
balance mechanism to ensure the interests both of the owners and other stakeholders.
Khan (2010) demonstrated that non-executive directors have a significant impact on
explaining the level of CSR disclosure in commercial banks in Bangladesh. Chen and Jaggi
(2000) mentioned that the non-executive directors played a substantial role regarding the
mandatory disclosure requirements giving the opportunity to investors to have a better
insight into corporate boards. On the other hand, Haniffa and Cooke (2005) demonstrated
that non-executive directors pressured companies to disclosure initiatives for legitimacy
purposes; however, a negative relationship was found between the proportion of
non-executive directors and the extent of CSR disclosure. Hossain and Reaz (2007) did not
find a significant relationship between the proportion of non- executive directors and CSR
disclosure in the banking sector of India. Said et al. (2009) cited the importance of
independent directors in the field of CSR; however, no significant influence was recorded
concerning the extent of CSR disclosure. It is obvious that the role of board composition of
the field of CSR is controversial; however, the hypothesis in this study is:

H9. Increased proportion of non-executives in the board has a positive relation to the
extent of CSR disclosure
3.10 CSR commitment

Most of the times, a company’s commitment to CSR is made through the establishment of
CSR standards, as they offer guidance on CSR issues (OECD, 2009). The development of
CSR standards represents a new framework of corporate governance (Giannarakis et al.,
2011b). It can be used as a proxy for the board’s commitment to CSR under external formal
instructions. Different CSR standards have been developed to homogenize the
multidimensional face of CSR in each country and sector. King et al. (2005) noted that
the attainment of the standard means the adoption of specific initiatives as regards the
standards’ guidelines. More specifically, the most well-known CSR standard is UNGC
where its members need to incorporate ten principles in four areas, that of human rights,
labour, environment and anti-corruption to fulfil the aim and principles of the CSR (Arevalo
and Aravind, 2010; Kimbro and Cao, 2011). Several studies have analyzed the role of
UNGC in the field of CSR and corporate governance (Arevalo and Fallon, 2008; Gupta,
2007). Arevalo and Aravind (2010) found that companies that integrate UNCG initiatives in
their business operations will be affected less by economic crisis in comparison to

companies that adopt with lesser conformity the principles of UNGC. Runhaar and Lafferty
(2009) indicated that the UNGC is only one of the numerous initiatives that contribute to the
development and communication of CSR. Finally, the level of CSR implementation
increases with the time of membership in the UNGC (Cetindamar and Husoy, 2007;
Schembera, 2012). Thus, CSR commitment through well-known standards, such as UNGC
forces companies to publish their social behavior. Based on the afore-mentioned
discussion the hypothesis is:
H10. Company’s engagement with UNGC has a positive association with the extent of
CSR disclosure.
4. Methodology
4.1 Sample
The sample consists of 100 companies from the Fortune 500 list in the USA through a
random procedure for the year ended 2011. Similar to previous empirical studies, the
sample is based on large-sized companies, as it is expected to integrate socially
responsible initiatives, and it is more possible to find corporate data from online database
in relation to CSR. The analysis engaged only in the US economy for comparability
purposes which will produce homogeneous results (Gamerschlag et al., 2010; Matten and
Moon, 2008).
4.2 Dependent disclosure indices and independent variables

This section concerns both dependent and independent explanatory variables in the
proposed model. Contrary to empirical studies where researchers construct a CSR
disclosure index on their own and adopt criteria existing in the literature, this study is based
on a third-party rating to evaluate the CSR disclosure score. A number of different
sustainability indices and ESG agencies have been developed to study companies in terms
of sustainability, under economic, social, environmental and corporate governance criteria
(Escrig-Olmedo et al., 2010). Sariannidis et al. (2010) noted that the main limitations of the
most well-known SRI indices are lack of transparency and neglect of the aspect of sector
where the companies operate.
For the first time, the ESG disclosure score provided by Bloomberg’s online database is
used as a proxy for the extent of CSR disclosure. Bloomberg scores companies solely on
their ESG data disclosure. The ESG disclosure score is a means to provide information to
users for a better understanding of the company’s risks and opportunities associated with
social expectations and potential investments. The score is based on 100 out of 219 raw

data points that Bloomberg collects based mainly on GRI requirements. The ESG
disclosure score ranges from 0.1 for companies that disclose a minimum amount of social
and environmental data to 100 for those that disclose every data point. Each data point is
weighted in terms of importance, with the workforce data carrying greater weight than other
disclosures. The score is also tailored to different industries. In this way, each company is
only evaluated in terms of the data that are relevant to its industry sector as each sector has
unique characteristics and challenges regarding CSR concerns (Fafaliou et al., 2006;
Giannarakis and Litinas, 2011; Giannarakis et al., 2011a; Sariannidis et al., 2010).
The ESG data are based mainly on three categories: environmental, social and
governance: the first category includes data, such as water consumption, waste total
generation, total greenhouse gases and energy use. The social aspect concerns data,
such as employee turnover, workforce accidents, total fatalities and women in the
workforce, while the governmental aspect includes data, such as board meeting
attendance and independent directors.
As far as the explanatory variables are concerned, Table II presents the independent
variables that are recommended to explain the extent of disclosure information achieved
from Bloomberg’s online database.

A multiple linear regression model attempts to investigate the interrelationship between
explanatory variables and the extent of CSR disclosure (Khan, 2010; Siregar and Bachtiar,
2010; Mohd Ghazali, 2007; Hossain and Reaz, 2007; Branco and Rodrigues, 2008; Haniffa
and Cooke, 2005; Reverte, 2009) using the statistical package Eviews:
ESGDS ⫽ a0 ⫹ b1 ⫻ CSIZE ⫹ b2 ⫻ FLRG ⫹ b3 ⫻ PROF1 ⫹ b4 ⫻ PROF2
⫹ b5 ⫻ CEOD ⫹ b6 ⫻ BSIZE ⫹ b7 ⫻ NBMTNGS ⫹ b8 ⫻ BAGE
⫹ b9 ⫻ WBOARD ⫹ b10 ⫻ BCOMP ⫹ b11 ⫻ BCCSR
where:
ESGDS ⫽ environmental, social and governmental disclosure score;
CSIZE ⫽ company size;
FLRG ⫽ financial leverage;
PROF1 ⫽ profitability indicator – ROE;
PROF2 ⫽ profitability indicator – ROS;
CEOD ⫽ CEO duality;
BSIZE ⫽ board’s size;
NBMTNGS ⫽ number of board meetings;
BAGE ⫽ board’s average age;
WBOARD ⫽ women on board;
BCOMP ⫽ board’s composition; and
BCCSR ⫽ board’s commitment to CSR.
Table II Description of independent variables

Independent variables Measurement
Firm size Total assets

Board composition Percentage of independent directors on the Board
Board’s commitment to CSR Dummy variable (value 1 ⫽ signatory of the UNGC, value 0 ⫽ no signatory of the UNGC)
Financial leverage Average total assets/average total common equity firm’s capital structure
Profitability Return on sales (ROS)
Return on equity (ROE)
CEO duality Dummy variable (value 1 ⫽ CEO and Chairman, value 0 ⫽ otherwise)
Board’s size Number of directors on the company’s board
Board meetings Total number of corporate board meetings for the year 2011
Board’s age Board average age
Women on board Percentage of women on board

Before conducting the regression model, different statistical tests were used, namely,
Durbin–Watson (D–W)’s test, Jarque–Bera’s test and White’s test to ensure that the data are
appropriate for the statistical analysis. In addition, the correlation matrix table was used for
detecting multicollinearity problems.
5. Results
5.1 Regression analysis
Table III presents Pearson’s correlation analysis among explanatory variables with their
significance level. When the correlation coefficient between explanatory variables is over
0.80, it is an indication of serious multicollinearity (Guajarati, 1995). In this study, the
Pearson correlations between explanatory variables range from 0.168 to 0.542; thus,
multicollinearity is not a problem for interpreting the regressions results.
Table IV presents the results of regressing the explanatory variables to the ESG disclosure
score. Regarding heteroscedasticity test, the chi-squared test is not significant; thus, there
are no heteroscedasticity concerns and no corrective procedure should be made. In
addition, no autocorrelation exists, as the D–W test is approximately 2, while F-ration is 3.44
Table III Correlation matrix

CSIZE BAGE BSIZE CEOD BCCSR FLRG NBMTNGS PROF2 PROF1 WBOARD BCOMP
CSIZE 1
BAGE 0.044 1
BSIZE 0.152 0.276* 1
CEOD 0.014 ⫺0.036 ⫺0.023 1
BCCSR 0.042 ⫺0.052 0.140 ⫺0.114 1
FLRG 0.542* 0.044 0.168*** 0.120 ⫺0.133 1
NBMTNGS 0.403* 0.071 ⫺0.178*** 0.104 0.003 0.202** 1
PROF2 0.227** 0.197** 0.126 ⫺0.090 0.054 0.055 0.047 1
ROE ⫺0.112 0.021 0.075 ⫺0.068 ⫺0.026 0.347* ⫺0.153 0.169*** 1
WBOARD 0.099 ⫺0.274* ⫺0.100 ⫺0.016 0.023 0.088 0.261* ⫺0.097 ⫺0.048 1
BCOMP 0.063 ⫺0.065 ⫺0.143 0.220** 0.054 0.096 0.162 ⫺0.033 0.108 0.222** 1
Notes: *Significant at the 0.10 level (two-tailed); **Significant at the 0.05 level (two-tailed); ***Significant at the 0.01 level (two-tailed)
Table IV Regression results

Independent variable Coefficient Standard error t-Statistic Probability
WBOARD 0.123454 0.181001 0.682064 0.4970

PROF1 0.253501 0.076769 3.302102 0.0014*
PROF2 29.46676 15.18361 1.940695 0.0555***
NBMTNGS 0.463156 0.501322 0.923869 0.3581
FLRG ⫺1.272134 0.510825 ⫺2.490350 0.0146**
BCCSR 10.85441 3.930043 2.761906 0.0070*
CEOD 3.704725 3.334521 1.111022 0.2696
BSIZE ⫺0.990343 0.854941 ⫺1.158376 0.2498
CSIZE 1.35E-05 5.91E-06 2.286236 0.0246*
BAGE 0.576546 0.456661 1.262527 0.2101
BCOMP ⫺19.73907 16.19261 ⫺1.219017 0.2261
C 9.111678 30.55040 0.298251 0.7662
R2 0.300754
Adjusted R2 0.213348
F-statistic 3.440896
Probability (F-statistic) 0.000521
D–W statistic 1.981226
White heteroskedasticity test Obs*R2 ⫽ 80.35423
p ⫽ 0.3151
Jarque–Bera test JB ⫽ 0.485290
p ⫽ 0.784550
Notes: *Significant at the 0.10 level (two-tailed); **Significant at the 0.05 level (two-tailed); ***Significant at the 0.01 level (two-tailed)

(p ⬍ 0.01). The model’s explanatory power can be considered satisfied, with an adjusted
R2 measure 0.213, implying that the explanatory variables explain 21.3 per cent of the
variance in ESG disclosure score.
As hypothesized, the coefficient of profitability variables is positive and significant at 10 per
cent for ROE variable and 1 per cent for ROS variable. Regarding the company’s size, it
was hypothesized to have positive relationship with the CSR disclosure score. Result show
that total assets are significant and positively related at 5 per cent. Therefore, financial
leverage is negatively associated with CSR disclosure score and statistically significant at
the 5 per cent level. The company’s commitment to CSR standards is the last significant
variable and positively related to CSR disclosure level at 10 per cent. As far as the rest of
the proposed variables are concerned, there is no significant association with the level of
CSR disclosure. Thus, the final model can be demonstrated as follows:
ESGDS ⫽ 0.25 PROF1 ⫹ 29.46 PROF2 ⫺ 1.27 FLRG ⫹ 01.35 CSIZE ⫹ 10.85 BCCSR
5.2 Discussion of results

Profitability indicators, as measured by ROS and ROE, have a positive relationship with the
extent of CSR disclosures. Profitable companies tend to provide more information in their
disclosures. This finding is consistent with the study by Haniffa and Cooke (2005), Khan
(2010), Gamerschlag et al. (2010) and Tagesson et al. (2009). Profitable companies
provide more CSR information on disclosure to legitimize their existence. The management
of profitable companies is freer to incorporate a social approach integrating disclosure
initiatives to show their contribution to society and to promote a positive impression of its
performance. The positive relationship of profitability to CSR disclosure is inconsistent with
Siregar and Bachtiar (2010), Reverte (2009), Mohd Ghazali (2007), Rahman et al. (2011),
where no significant influence was found on the extent of CSR disclosure.
Financial leverage coefficient shows that this explanatory variable is significantly negatively
correlated with the extent of CSR disclosure. Companies with high levels of leverage do not
seem to share less corporate information with their creditors, probably because the
reporting procedure is costly. Likewise, Branco and Rodrigues (2008) and Andrikopoulos
and Kriklani (2012) reached similar results.
It is demonstrated that the company’s size is positively related to the extent of CSR
disclosure, thereby suggesting that the larger US companies provide more information on
CSR disclosures. It is probably due to the fact that larger companies are more visible than
smaller ones, dispose more financial resources on social initiatives, such as CSR
disclosures, absorb the extra cost of disclosure, face more pressure to publish their social
initiatives from stakeholders’ groups and, finally, incorporate CSR disclosure into their
image construction procedure (Alsaeed, 2006; Siregar and Bachtiar, 2010; Cormier and
Gordon, 2001; Mohd Ghazali, 2007). The result is consistent with Eilbert and Parket (1973),
Trotman and Bradley (1981), Haniffa and Cooke (2005), Branco and Rodrigues (2008),
Gamerschlag et al. (2010), Hossain and Reaz (2007), Khan (2010), Reverte (2009) and
Rahman et al. (2011).
Finally, the implementation of UNGC standard as a proxy for the board’s commitment to
CSR is a decisive factor on the extent of CSR disclosure. Companies that incorporate the
ten principles of UNGC tend to provide more information to publicize the implementation of
CSR in their business operations to their stakeholders. The development of CSR policy
under the instructions of a well-known CSR standard pushes companies to publish what
and how to treat corporate stakeholders’ expectations.
In contrast to the hypothesis, the increased presence of women in the board is insignificant
to the level of CSR disclosure. The gender diversity of a board does not seem to be a
determinant factor for the extent of CSR disclosure, consistent with Khan (2010) and
inconsistent with earlier studies, where women in boards are more socially sensitive (Wang
and Coffey, 1992; Williams, 2003). The study found that the board’s size does not affect the

extent of CSR disclosure which is inconsistent with Esa and Mohd Ghazali (2011), Said
et al. (2009) and Siregar and Bachtiar (2010). In addition, the number of board meetings
does not play a substantial role to the extent of CSR disclosure, probably because the
board of directors is only responsible for CSR at policy level and not for the implementation
of CSR which, in all probability, is the most time-consuming part.
The board’s average age was found not to affect the extent of CSR disclosure contrary to
the hypothesis development. The insignificant role of CEO duality on CSR disclosure is due
to indirect monitoring mechanism that companies incorporate to allow their stakeholders
learn about their initiatives (Michelon and Parbonetti, 2012). This result is consistent with
earlier empirical studies, such as those of Said et al. (2009) and Cheng and Courtenay
(2006). Regarding the board composition, no significant relationship was found with CSR
disclosure. The board’s composition should be made beyond the traditional distinction
between executives and non-executives, such as their managerial experience and whether
they have worked in international companies or not. This result is consistent with previous
empirical studies, such as Hossain and Reaz (2007) and Said et al. (2009).
The results of the study send a vital signal to the various stakeholders with whom
companies interact. First, investors are able to detect profitable companies through the
extent of CSR disclosure. Second, SRI and reporting institutions are able to understand the
determinants of CSR disclosure improving the implementation of disclosure guidelines.
Finally, other stakeholders such as employees, consumers and NGOs are informed on the
positive initiatives of the companies in relation to corporate stakeholders.
6. Conclusions
During the past decades, shareholders and other stakeholders’ pressure for business
transparency has led companies to develop CSR disclosures. The objective of the study is
to investigate the determinants of the extent of CSR disclosure by the US companies. For
the first time, the study is incorporating the ESG disclosure score collected by Bloomberg’s
online database. Both corporate governance and financial variables are concerned,
namely, board meeting frequency, board age, presence of women on board, board size,
CEO duality, financial leverage, profitability, size, board composition and board
commitment to CSR. The statistical results show that profitability, the company’s size, the
financial leverage and the board’s commitment to CSR are significant determinants that
influence the extent of CSR disclosure.
More specifically, profitability, as measured by ROE and ROS, is significantly positive to the
extent of CSR disclosure, consistent with Haniffa and Cooke (2005), Khan (2010),
Gamerschlag et al. (2010) and Tagesson et al. (2009). Profitable companies use CSR
disclosures as a mean to publicize their image and legitimize their corporate initiatives. In
addition, profitable companies can devote more financial resources to social initiatives
promoting a positive impression of their performance.
Financial leverage as a proxy for creditors’ power has a negative and significant effect on
CSR disclosure consistent with Branco and Rodrigues (2008) and Andrikopoulos and
Kriklani (2012). Companies with high levels of financial leverage seem not to publicize
corporate information because of the reporting procedure cost, while companies with low
financial leverage levels seemed to be freer to share information as regards CSR
information.
The company’s size, as measured by total assets, has a positive relationship with CSR
disclosure which is in line with conclusions from previous empirical studies, such as those
of Haniffa and Cooke (2005), Branco and Rodrigues (2008), Gamerschlag et al. (2010),
Hossain and Reaz (2007), Khan (2010), Reverte (2009) and Rahman et al. (2011). Rahman
(2011) pointed out several reasons for this reaction, such as that large companies are more
visible to investors, absorb extra costs for CSR disclosure, attend the maintenance of their
good corporate image and retain the customers’ loyalty and talented employees. Finally,

the board’s commitment to CSR is an important determinant of the extent of CSR
disclosure. The implementation of CSR initiatives under the ten principles of UNGC pushes
companies to provide information in their disclosures on what and how to satisfy the
corporate stakeholders’ expectations. The rest of explanatory variables are not statistically
significant to ESG disclosure score. This implies that the presence of women on board, the
board’s composition, the board’s average age, the board’s size, CEO duality and the
number of board meetings do not have a significant influence on the extent of CSR
disclosure.
From a practical point of view, both shareholders and stakeholders have the opportunity for
a quick assessment of a company through its CSR disclosure regarding the four statistically
significant explanatory variables. For example, a high level of ESC disclosure score is an
indication that a company is large, profitable, independent from the creditor’s pressures,
and the board is committed to CSR standard; important information, mostly, for ethical
investors and other stakeholders. At a policy level, this study contributes to the
understanding of determinants of CSR disclosure to improve the implementation of
disclosure guidelines (Da Silva Monteiro and Aibar-Guzmán, 2010).
The study presents some limitations. First, it is based only on the presence or the absence
of CSR items in CSR disclosure, neglecting the quality dimension which can lead to
misinterpretation. The results should not be generalized, as the sample is based on the US
companies for 2011. Finally, Bloomberg’s online database does not provide accurate
information with regard to the evaluation formula and the specific criteria that are
incorporated into the ESG disclosure score.
Despite the limitations, this study contributes to the literature of the determinants of CSR
disclosure. For the first time, new explanatory variables are introduced, such as the number
of board meetings, the board’s average age and the board’s commitment to CSR through
UNGC standard, while the calculation of CSR disclosure score is based on Bloomeberg’s
ESG score.
7. Suggestions for future research

It is recommended that more companies from different countries and cultural orientations
must be included in the sample, as the concept of CSR varies among them (Hackston and
Milne, 1996; Giannarakis et al., 2011a; McMurtrie, 2005). It is proposed that analysis be
taken over a longer period of time to provide more reliable and generalized results. In
contrast to the empirical studies, the construction of CSR disclosure index could be based
not only on quantitative but also on qualitative criteria (Brammer and Pavelin, 2008). In
addition, external stakeholders’ perceptions should be considered in future research using
different methodological tools, such as interviews to specify the company’s characteristics
of the level of CSR disclosure. It would be essential to test the developed model with
different samples of companies, such as small and medium companies, to record whether
the results are meaningful as well. Therefore, the development of CSR disclosure score
could be based not only on Bloomberg’s online database but also on other means, such as
official corporate websites (Wanderly et al., 2008). Finally, more corporate characteristics
can be examined, such as environmental fines, carbon dioxide emissions or other
greenhouse emissions in the avenue for future research in this field.
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Grigoris Giannarakis is a Abstract

probably be an incentive to companies excluded from Socially Responsible Investments

PAGE 570 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 4 2014

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1. contribution to health sector;

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Gamerschlag Germany 130 largest companies (DAX,

(2009) Stockholm Stock Exchange and Profitability

Figure 1 Research model

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3.1 Company’s size

3.2 Financial leverage

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environmental disclosures but no association with social disclosures. Tagesson et al.

3.4 CEO duality

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3.5 Board size

3.6 Board meetings

3.7 Board’s average age

VOL. 10 NO. 4 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 577

3.8 Women on board

3.9 Board composition

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3.10 CSR commitment

their business operations will be affected less by economic crisis in comparison to

4.2 Dependent disclosure indices and independent variables

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from Bloomberg’s online database.

Table II Description of independent variables

Firm size Total assets

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Table III Correlation matrix

Table IV Regression results

WBOARD 0.123454 0.181001 0.682064 0.4970

VOL. 10 NO. 4 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 581

5.2 Discussion of results

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VOL. 10 NO. 4 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 583

7. Suggestions for future research

PAGE 584 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 4 2014

Andrikopoulos, A. and Kriklani, N. (2012), “Environmental disclosure and financial characteristics of

Bhimani, A. and Soonawalla, K. (2005), “From conformance to performance: the corporate

VOL. 10 NO. 4 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 585

PAGE 586 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 4 2014

Global Reporting Initiative (2012), available at: http://database.globalreporting.org (accessed 30

Guajarati, D.N. (1995), Basic Econometrics, McGrawHill, New York, NY.

Hooghiemstra, R. (2000), “Corporate communication and impression management – new perspectives

VOL. 10 NO. 4 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 587

Kolk, A. (2005), “Environmental reporting by multinationals from the triad: convergence of

Laksmana, I. (2008), “Corporate board governance and voluntary disclosure of executive

Lawyer, Vol. 48 No. 1, pp. 59-77.

Liu, X. and Anbumozhi, V. (2009), “Determinant factors of corporate environmental information

McMurtrie, T. (2005), “Factors influencing the publication of social performance information: an

Michelon, G. and Parbonetti, A. (2012), “The effect of corporate governance on sustainability

PAGE 588 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 4 2014