The contribution of financial entities to the sustainable development through the reporting of corporate social responsibility information

Abstract

This paper aims at examining the relationship between board composition and corporate social responsibility (CSR) of a sample of listed financial entities, discussing the driving reasons of these entities to disclose CSR information. We hypothesize that there is a positive association between outside (institutional and independent directors) and female directors and CSR disclosure and a negative relationship between inside directors and CSR reporting. Our findings provide evidence that the proportions of independent directors and female directors on boards encourage CSR disclosure. Moreover, the results also show that the proportions of inside directors and institutional directors on boards do not have influence on CSR reporting. Thus, our evidence suggests that board attributes such as independent and female directors encourage financial entities to report CSR matters, showing the effectiveness of these two corporate governance mechanisms. The paper shed light on the influence of board structure of financial entities on CSR disclosure. Therefore, this study contributes to past research by providing an index to measure CSR disclosure of financial entities and the importance of the distinction between outside and inside directors.