Assurance of corporate social responsibility reports: Examining the role of internal and external corporate governance mechanisms

Isabel‐María García‐Sánchez, Nazim Hussain*, Sana Akbar Khan, Jennifer Martínez‐Ferrero

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Abstract

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.
Original languageEnglish
Article number2186
Number of pages18
JournalCorporate Social Responsibility and Environmental Management
DOIs
Publication statusE-pub ahead of print - 21-Jul-2021

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