Abhigyan

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Board Independence and Sustainability Disclosure Practices in Indian Companies


Affiliations
1 Assistant Professor in Commerce, Directorate of Distance Education, Vidyasagar University, India
2 Assistant Professor, Department of Commerce, Vidyasagar University, India
3 Professor, Department of Commerce, Vidyasagar University, India
     

   Subscribe/Renew Journal


The study attempts to explore the effect of board independence, as an important corporate governance parameter, on the sustainability disclosures practices of 38 listed Indian companies during the period of 2013-17. Sustainability performance is measured with the help of content analysis considering Global Reporting Initiative (GRI) indicators in three major parameters, such as, social, economic and environmental. Using panel data regression analysis, the study finds a significant positive relationship between board independence and the economic parameter of sustainability disclosure. Finally, based on the findings, the study recommends the Indian corporate establishments to ensure independent board of directors for better sustainability performance. As a part of future research directions, the study thinks it is important to identify the factors that actually impact the other two measures of sustainability performance of Indian companies.

Keywords

Corporate Governance, Board Independence, Sustainability Performance, Global Reporting Initiative, Panel Data Analysis.
User
Subscription Login to verify subscription
Notifications
Font Size

  • Abidin, Z. Z., Kamal, N. M., & Jusoff, K. (2009). Board Structure and Corporate Performance in Malaysia. International Journal of Economics and Finance, 1(1), 150.

  • Ahmad, N., Rashid, A., & Gow, J. (2017). Board Independence and Corporate Social Responsibility (CSR) Reporting in Malaysia. Australasian Accounting, Business and Finance Journal, 11(2), 61-85.

  • Altaf, N., & Shah, F. A. (2018). Ownership Concentration and Firm Performance in Indian Firms: Does Investor Protection Quality Matter? Journal of Indian Business Research, 10(1), 33-52.

  • Bae, S., Masud, M., & Kim, J. (2018). A Cross-Country Investigation of Corporate Governance and Corporate Sustainability Disclosure: A Signalling Theory Perspective. Sustainability, 10(8), 2611.

  • Baysinger, B. D., Kosnik, R. D., & Turk, T. A. (1991). Effects of Board and Ownership Structure on Corporate R&D Strategy. Academy of Management Journal, 34(1), 205-214.

  • Chakrabarty, S., & Wang, L. (2012). The Long-Term Sustenance of Sustainability Practices in MNCs: A Dynamic Capabilities Perspective of the Role of R&D and Internationalization. Journal of Business Ethics, 110(2), 205-217.

  • Dienes, D., Sassen, R. & Fischer, J. (2016). What are the Drivers of Sustainability Reporting? A Systematic Review. Sustainability Accounting, Management and Policy Journal, 7(2), 154-189.

  • Fonseca, A., McAllister, M. L., & Fitzpatrick, P. (2014). Sustainability Reporting among Mining Corporations: A Constructive Critique of the GRI Approach. Journal of Cleaner Production, 84, 70 83.

  • Ganguli, S., & Guha Deb, S. (2016). Board Composition, Ownership Structure and Firm Performance: New Indian Evidence in a Unique Regulatory Environment. Available at SSRN: https://ssrn.com/abstract=2746773 or http://dx.doi.org/10.2139/ssrn.2746773.

  • Garg, A. K. (2007). Influence of Board Size and Independence on Firm Performance: A Study of Indian Companies. Vikalpa, 32(3), 39-60.

  • GRI (2006). Sustainability Reporting Guidelines. Available at: https://www.globalreporting.org/

  • Hamid, M. A., Ting, I. W. K., & Kweh, Q. L. (2016). The Relationship between Corporate Governance and Expropriation of Minority Shareholders' Interests. Procedia Economics and Finance, 35, 99-106.

  • Haque, F., & Ntim, C. G. (2018). Environmental Policy, Sustainable Development, Governance Mechanisms and Environmental Performance. Business Strategy and the Environment, 27(3), 415-435.

  • Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance. Journal of Business Ethics, 149(2), 411-432.

  • Ibrahim, N. A., Howard, D. P. & Angelidis, J. P. (2003). Board Members in the Service Industry: An Empirical Examination of the Relationship between Corporate Social Responsibility Orientation and Directorial Type. Journal of Business Ethics, 47(4), 393-401.

  • Janggu, T., Darus, F., Zain, M. M., & Sawani, Y. (2014). Does Good Corporate Governance Lead To Better Sustainability Reporting? An Analysis Using Structural Equation Modelling. Procedia-Social and Behavioral Sciences, 145, 138-145.

  • Manna, A., & Sahu, T. N. (2013). Does Board Composition Affect Firms Performance? An Empirical Study on Selected Indian Manufacturing Companies. Management Today, 3(2), 21-31.

  • Mahmood, Z., Kouser, R., Ali, W., Ahmad, Z., & Salman, T. (2018). Does Corporate Governance Affect Sustainability Disclosure? A Mixed Methods Study. Sustainability, 10(1), 207.

  • Majeed, S., Aziz, T., & Saleem, S. (2015). The Effect of Corporate Governance Elements on Corporate Social Responsibility (CSR) Disclosure: An Empirical Evidence from Listed Companies at KSE Pakistan. International Journal of Financial Studies, 3(4), 530-556.

  • Marti, C.P., Rovira-Val, M.R. & Drescher, L.G. J. (2015). Are Firms that Contribute to Sustainable Development Better Financially? Corporate Social Responsibility and Environmental Management, 22, 305–319 (2015). DOI: 10.1002/csr.1347

  • Michelon, G. & Parbonetti, A. (2012). The Effects of Corporate Governance on Sustainability Disclosure. Journal of Management and Governance, 16(3), 477-509.

  • Müller, V. O. (2014). The Impact of Board Composition on the Financial Performance of FTSE100 Constituents. Procedia-Social and Behavioral Sciences, 109, 969-975.

  • N. Al-Malkawi, H.-A., Pillai, R., & Bhattti, M.I. (2014). Corporate Governance Practices in Emerging Markets: The Case of GCC Countries. Economic Modelling, 38, 133-141.

  • Nurhayati, R., Taylor, G., & Tower, G. (2015). Investigating Social and Environmental Disclosure Practices by Listed Indian Textile Firms. The Journal of Developing Areas, 49(6), 361-372.

  • Pandey, K. D., & Sahu, T. N. (2017). An Empirical Analysis on Capital Structure, Ownership Structure and Firm Performance: Evidence from India. Indian Journal of Commerce and Management Studies, 8(2), 63-72.

  • Pandey, K. D., & Sahu, T. N. (2017). Financial Leverage, Firm Performance and Value: with Reference to Indian Manufacturing Firms. Asian Journal of Research in Banking and Finance, 7(7), 265-274.

  • Pandey, K. D., & Sahu, T. N. (2019). Concentrated Promoters' Ownership and Firm Value: Re Examining the Monitoring and Expropriation Hypothesis. Paradigm, 23(1), 70-82.

  • Patelli, L., & Prencipe, A. (2007). The Relationship between Voluntary Disclosure and Independent Directors in the Presence of a Dominant Shareholder. European Accounting Review, 16(1), 5-33.

  • Post, C., Rahman, N. & Rubow, E. (2011). Green Governance: Boards of Directors' Composition and Environmental Corporate Social Responsibility. Business & Society, 50(1), 189-223.

  • Prado-Lorenzo, J. M., & Garcia-Sanchez, I. M. (2010). The Role of the Board of Directors in Disseminating Relevant Information on Greenhouse Gases. Journal of Business Ethics, 97(3), 391-424.

  • Rouf, D. (2011). Corporate Characteristics, Governance Attributes and the Extent of Voluntary Disclosure in Bangladesh. African Journal of Business Management, 5(19), 7836-7845.

  • Sahu, T. N., & Manna, A. (2013). Impact of Board Composition and Board Meeting on Firms' Performance: A Study of Selected Indian Companies. Vilakshan: The XIMB Journal of Management, 10(2), 99-112.

  • Said, R., Hj Zainuddin, Y., & Haron, H. (2009). The Relationship between Corporate Social Responsibility Disclosure and Corporate Governance Characteristics in Malaysian Public Listed Companies. Social Responsibility Journal, 5(2), 212-226.


Abstract Views: 355

PDF Views: 1




  • Board Independence and Sustainability Disclosure Practices in Indian Companies

Abstract Views: 355  |  PDF Views: 1

Authors

Ritu Pareek
Assistant Professor in Commerce, Directorate of Distance Education, Vidyasagar University, India
Krishna Dayal Pandey
Assistant Professor in Commerce, Directorate of Distance Education, Vidyasagar University, India
Tarak Nath Sahu
Assistant Professor, Department of Commerce, Vidyasagar University, India
Arindam Gupta
Professor, Department of Commerce, Vidyasagar University, India

Abstract


The study attempts to explore the effect of board independence, as an important corporate governance parameter, on the sustainability disclosures practices of 38 listed Indian companies during the period of 2013-17. Sustainability performance is measured with the help of content analysis considering Global Reporting Initiative (GRI) indicators in three major parameters, such as, social, economic and environmental. Using panel data regression analysis, the study finds a significant positive relationship between board independence and the economic parameter of sustainability disclosure. Finally, based on the findings, the study recommends the Indian corporate establishments to ensure independent board of directors for better sustainability performance. As a part of future research directions, the study thinks it is important to identify the factors that actually impact the other two measures of sustainability performance of Indian companies.

Keywords


Corporate Governance, Board Independence, Sustainability Performance, Global Reporting Initiative, Panel Data Analysis.

References