Board Social Capital and Corporate Social Responsibility Reporting: A panel Study from Listed Kenyan Firms
Keywords:
Board Capital, Board Social Capital, Board Relations, CSR Reporting, Firm Age, Firm Profitability, Board Size, Firm Size
Abstract
The primary objective of this study is to examine the impact of board relations on CSR reporting as a critical component of board social capital. This research also takes into account board size, firm size, firm age, and firm profitability as controls. The sample consists of Kenyan listed firms on the Nairobi Securities Exchange from 2009 to 2020. A panel data model with fixed effect regression is used. Based on a resource dependence perspective, show a significant positive relationship between board relations and the level of CSR reporting. These findings contribute to academic discourse about the social capital of board members. The authors, in particular, emphasize the significance of board relationships and their implications for decision making regarding CSR reporting. This evidence may be useful to firms when forming boards of directors, as well as regulators and professional organizations when reassessing legislation and guidelines
References
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Arayssi, M., Dah, M., & Jizi, M. (2016). Women on boards, sustainability reporting and firm performance. Sustainability Accounting, Management and Policy Journal.
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Bryant, P., & Davis, C. (2012). Regulated change effects on boards of directors: A look at agency theory and resource dependency theory. Academy of Strategic Management Journal, 11(2), 1.
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Deegan, C., & Blomquist, C. (2006). Stakeholder influence on corporate reporting: An exploration of the interaction between WWF-Australia and the Australian minerals industry. Accounting, organizations and society, 31(4-5), 343-372.
Fahad, P., & Nidheesh, K. B. (2020). Determinants of CSR disclosure: evidence from India. Journal of Indian Business Research, 13(1), 110-133.
Fahad, P., & Rahman, P. M. (2020). Impact of corporate governance on CSR disclosure. International Journal of Disclosure and Governance, 17(2), 155-167.
Fernández‐Gago, R., Cabeza‐García, L., & Nieto, M. (2018). Independent directors' background and CSR disclosure. Corporate Social Responsibility and Environmental Management, 25(5), 991-1001.
Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: a review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal.
Habbash, M. (2016). Corporate governance and corporate social responsibility disclosure: evidence from Saudi Arabia. Social Responsibility Journal.
Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of accounting and public policy, 24(5), 391-430.
Haynes, K. T., & Hillman, A. (2010). The effect of board capital and CEO power on strategic change. Strategic management journal, 31(11), 1145-1163.
Hendry, K., & Kiel, G. C. (2004). The role of the board in firm strategy: Integrating agency and organisational control perspectives. Corporate Governance: An International Review, 12(4), 500-520.
Hossain, M., & Reaz, M. (2007). The determinants and characteristics of voluntary disclosure by Indian banking companies. Corporate Social Responsibility and Environmental Management, 14(5), 274-288.
Ioannou, I., & Serafeim, G. (2015). The impact of corporate social responsibility on investment recommendations: Analysts' perceptions and shifting institutional logics. Strategic Management Journal, 36(7), 1053-1081.
Jackson, S. E. (1992). Consequences of group composition for the interpersonal dynamics of strategic issue processing. Advances in strategic management, 8(3), 345-382.
Jain, T., & Jamali, D. (2016). Looking inside the black box: The effect of corporate governance on corporate social responsibility. Corporate governance: an international review, 24(3), 253-273.
Johnson, S. G., Schnatterly, K., & Hill, A. D. (2013). Board composition beyond independence: Social capital, human capital, and demographics. Journal of management, 39(1), 232-262.
Khaireddine, H., Salhi, B., Aljabr, J., & Jarboui, A. (2020). Impact of board characteristics on governance, environmental and ethical disclosure. Society and Business Review.
Khan, M. T., Khan, N. A., Ahmed, S., & Ali, M. (2012). Corporate social responsibility (CSR)–definition, concepts and scope. Universal Journal of Management and Social Sciences, 2(7), 41-52.
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Kim, Y., & Cannella Jr, A. A. (2008). Toward a social capital theory of director selection. Corporate Governance: An International Review, 16(4), 282-293.
Lin, N. (2002). Social capital: A theory of social structure and action (Vol. 19). Cambridge university press.
Macus, M. (2008). Board capability; An interactions perspective on boards of directors and firm performance. International Studies of Management & Organization, 38(3), 98-116.
Mahmood, M., & Orazalin, N. (2017). Green governance and sustainability reporting in Kazakhstan's oil, gas, and mining sector: Evidence from a former USSR emerging economy. Journal
of cleaner Production, 164, 389-397.
Maman, D. (2001). The organizational connection: Social capital and the career expansion of directors of business groups in Israel. Social Science Research, 30(4), 578-605.
Maswadi, L., & Amran, A. (2022). Does board capital enhance corporate social responsibility disclosure quality? The role of CEO power. Corporate Social Responsibility and Environmental Management.
McGrath, J. E. (1984). Groups: Interaction and performance (Vol. 14). Englewood Cliffs, NJ: Prentice-Hall.
Michelon, G., & Parbonetti, A. (2012). The effect of corporate governance on sustainability disclosure. Journal of management & governance, 16(3), 477-509.
Michelon, G., & Rodrigue, M. (2015). Demand for CSR: Insights from shareholder proposals. Social and Environmental Accountability Journal, 35(3), 157-175.
Muttakin, M. B., Khan, A., & Mihret, D. G. (2018). The effect of board capital and CEO power on corporate social responsibility disclosures. Journal of Business Ethics, 150(1), 41-56.
Muttakin, M. B., Mihret, D. G., & Khan, A. (2018). Corporate political connection and corporate social responsibility disclosures: A neo-pluralist hypothesis and empirical evidence. Accounting, Auditing & Accountability Journal.
Nawaiseh, M. E. (2016). Can earnings management be influenced by audit quality. International Journal of Finance and Accounting, 5(4), 209-219.
Pfeffer, J., & Leong, A. (1978). Resource dependence.
Pucheta‐Martínez, M. C., & Gallego‐Álvarez, I. (2019). An international approach of the relationship between board attributes and the disclosure of corporate social responsibility issues. Corporate Social Responsibility and Environmental Management, 26(3), 612-627.
Putnam, R. D. (1993). “The Prosperous Community,” The American Prospect 4(13).
Ramón-Llorens, M. C., García-Meca, E., & Pucheta-Martínez, M. C. (2019). The role of human and social board capital in driving CSR reporting. Long Range Planning, 52(6), 101846.
Rao, K., & Tilt, C. (2016). Board composition and corporate social responsibility: The role of diversity, gender, strategy and decision making. Journal of Business Ethics, 138(2), 327-347.
Reguera-Alvarado, N., & Bravo-Urquiza, F. (2021). The influence of board social capital on corporate social responsibility reporting. Journal of Intellectual Capital.
Rouf, M. A., & Hossan, M. A. (2020). The effects of board size and board composition on CSR disclosure: a study of banking sectors in Bangladesh. International Journal of Ethics and Systems.
Salancik, G. R., & Pfeffer, J. (1978). A social information processing approach to job attitudes and task design. Administrative science quarterly, 224-253.
Saleh, M., Zulkifli, N., & Muhamad, R. (2011). Looking for evidence of the relationship between corporate social responsibility and corporate financial performance in an emerging market. Asia-Pacific Journal of Business Administration.
Sial, M. S., Chunmei, Z., Khan, T., & Nguyen, V. K. (2018). Corporate social responsibility, firm performance and the moderating effect of earnings management in Chinese firms. Asia-Pacific Journal of Business Administration.
Sial, M. S., Zheng, C., Cherian, J., Gulzar, M. A., Thu, P. A., Khan, T., & Khuong, N. V. (2018). Does corporate social responsibility mediate the relation between boardroom gender diversity and firm performance of Chinese listed companies? Sustainability, 10(10), 3591.
Siregar, S. V., & Bachtiar, Y. (2010). Corporate social reporting: empirical evidence from Indonesia Stock Exchange. International Journal of Islamic and Middle Eastern Finance and Management.
Ting, P. H. (2021). Do large firms just talk corporate social responsibility? -The evidence from CSR report disclosure. Finance Research Letters, 38, 101476.
Tunyi, A. A., Agyei-Boapeah, H., Areneke, G., & Agyemang, J. (2019). Internal capabilities, national governance and performance in African firms. Research in International Business and Finance, 50, 18-37.
Tziner, A., & Vardi, Y. (1983). Ability as a moderator between cohesiveness and tank crews’ performance. Journal of Occupational Behaviour, 137-143.
Valenti, A., & Horner, S. (2020). The human capital of boards of directors and innovation: an empirical examination of the pharmaceutical industry. International Journal of Innovation
Management, 24(06), 2050056.
Velte, P. (2019). Does board composition influence CSR reporting? A meta-analysis. Corporate Ownership & Control, 16(2), 48-59.
Waweru, N., Mangena, M., & Riro, G. (2019). Corporate governance and corporate internet reporting in sub-Saharan Africa: the case of Kenya and Tanzania. Corporate Governance: The international journal of business in society, 19(4), 751-773.
Al-Gamrh, B., & Al-dhamari, R. (2019). Firm characteristics and corporate social responsibility disclosure in Saudi Arabia.
Alonso‐Almeida, M. D. M., Fernández de Navarrete, F. C., & Rodriguez‐Pomeda, J. (2015). Corporate social responsibility perception in business students as future managers: a multifactorial analysis. Business Ethics: A European Review, 24(1), 1-17.
Andrew, B. H., Gul, F. A., Guthrie, J. E., & Teoh, H. Y. (1989). A note on corporate social disclosure practices in developing countries: the case of Malaysia and Singapore. The British Accounting Review, 21(4), 371-376.
Arayssi, M., Dah, M., & Jizi, M. (2016). Women on boards, sustainability reporting and firm performance. Sustainability Accounting, Management and Policy Journal.
Bayoud, N. S. M. (2012). Corporate social responsibility disclosure and organisational performance: The case of Libya, a mixed methods study (Doctoral dissertation, University of Southern Queensland).
Bhatia, A., & Tuli, S. (2017). Corporate attributes affecting sustainability reporting: an Indian perspective. International Journal of Law and Management.
Bryant, P., & Davis, C. (2012). Regulated change effects on boards of directors: A look at agency theory and resource dependency theory. Academy of Strategic Management Journal, 11(2), 1.
Burt, R. S. (1997). A note on social capital and network content. Social networks, 19(4), 355-373.
Coleman, J. S. (1990). The Foundations of Social Theory. Cambridge, Mass: Harvard University Press.
Deegan, C., & Blomquist, C. (2006). Stakeholder influence on corporate reporting: An exploration of the interaction between WWF-Australia and the Australian minerals industry. Accounting, organizations and society, 31(4-5), 343-372.
Fahad, P., & Nidheesh, K. B. (2020). Determinants of CSR disclosure: evidence from India. Journal of Indian Business Research, 13(1), 110-133.
Fahad, P., & Rahman, P. M. (2020). Impact of corporate governance on CSR disclosure. International Journal of Disclosure and Governance, 17(2), 155-167.
Fernández‐Gago, R., Cabeza‐García, L., & Nieto, M. (2018). Independent directors' background and CSR disclosure. Corporate Social Responsibility and Environmental Management, 25(5), 991-1001.
Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: a review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal.
Habbash, M. (2016). Corporate governance and corporate social responsibility disclosure: evidence from Saudi Arabia. Social Responsibility Journal.
Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of accounting and public policy, 24(5), 391-430.
Haynes, K. T., & Hillman, A. (2010). The effect of board capital and CEO power on strategic change. Strategic management journal, 31(11), 1145-1163.
Hendry, K., & Kiel, G. C. (2004). The role of the board in firm strategy: Integrating agency and organisational control perspectives. Corporate Governance: An International Review, 12(4), 500-520.
Hossain, M., & Reaz, M. (2007). The determinants and characteristics of voluntary disclosure by Indian banking companies. Corporate Social Responsibility and Environmental Management, 14(5), 274-288.
Ioannou, I., & Serafeim, G. (2015). The impact of corporate social responsibility on investment recommendations: Analysts' perceptions and shifting institutional logics. Strategic Management Journal, 36(7), 1053-1081.
Jackson, S. E. (1992). Consequences of group composition for the interpersonal dynamics of strategic issue processing. Advances in strategic management, 8(3), 345-382.
Jain, T., & Jamali, D. (2016). Looking inside the black box: The effect of corporate governance on corporate social responsibility. Corporate governance: an international review, 24(3), 253-273.
Johnson, S. G., Schnatterly, K., & Hill, A. D. (2013). Board composition beyond independence: Social capital, human capital, and demographics. Journal of management, 39(1), 232-262.
Khaireddine, H., Salhi, B., Aljabr, J., & Jarboui, A. (2020). Impact of board characteristics on governance, environmental and ethical disclosure. Society and Business Review.
Khan, M. T., Khan, N. A., Ahmed, S., & Ali, M. (2012). Corporate social responsibility (CSR)–definition, concepts and scope. Universal Journal of Management and Social Sciences, 2(7), 41-52.
Kim, Y. (2007). The proportion and social capital of outside directors and their impacts on firm value: Evidence from Korea. Corporate Governance: An International Review, 15(6), 1168-1176.
Kim, Y., & Cannella Jr, A. A. (2008). Toward a social capital theory of director selection. Corporate Governance: An International Review, 16(4), 282-293.
Lin, N. (2002). Social capital: A theory of social structure and action (Vol. 19). Cambridge university press.
Macus, M. (2008). Board capability; An interactions perspective on boards of directors and firm performance. International Studies of Management & Organization, 38(3), 98-116.
Mahmood, M., & Orazalin, N. (2017). Green governance and sustainability reporting in Kazakhstan's oil, gas, and mining sector: Evidence from a former USSR emerging economy. Journal
of cleaner Production, 164, 389-397.
Maman, D. (2001). The organizational connection: Social capital and the career expansion of directors of business groups in Israel. Social Science Research, 30(4), 578-605.
Maswadi, L., & Amran, A. (2022). Does board capital enhance corporate social responsibility disclosure quality? The role of CEO power. Corporate Social Responsibility and Environmental Management.
McGrath, J. E. (1984). Groups: Interaction and performance (Vol. 14). Englewood Cliffs, NJ: Prentice-Hall.
Michelon, G., & Parbonetti, A. (2012). The effect of corporate governance on sustainability disclosure. Journal of management & governance, 16(3), 477-509.
Michelon, G., & Rodrigue, M. (2015). Demand for CSR: Insights from shareholder proposals. Social and Environmental Accountability Journal, 35(3), 157-175.
Muttakin, M. B., Khan, A., & Mihret, D. G. (2018). The effect of board capital and CEO power on corporate social responsibility disclosures. Journal of Business Ethics, 150(1), 41-56.
Muttakin, M. B., Mihret, D. G., & Khan, A. (2018). Corporate political connection and corporate social responsibility disclosures: A neo-pluralist hypothesis and empirical evidence. Accounting, Auditing & Accountability Journal.
Nawaiseh, M. E. (2016). Can earnings management be influenced by audit quality. International Journal of Finance and Accounting, 5(4), 209-219.
Pfeffer, J., & Leong, A. (1978). Resource dependence.
Pucheta‐Martínez, M. C., & Gallego‐Álvarez, I. (2019). An international approach of the relationship between board attributes and the disclosure of corporate social responsibility issues. Corporate Social Responsibility and Environmental Management, 26(3), 612-627.
Putnam, R. D. (1993). “The Prosperous Community,” The American Prospect 4(13).
Ramón-Llorens, M. C., García-Meca, E., & Pucheta-Martínez, M. C. (2019). The role of human and social board capital in driving CSR reporting. Long Range Planning, 52(6), 101846.
Rao, K., & Tilt, C. (2016). Board composition and corporate social responsibility: The role of diversity, gender, strategy and decision making. Journal of Business Ethics, 138(2), 327-347.
Reguera-Alvarado, N., & Bravo-Urquiza, F. (2021). The influence of board social capital on corporate social responsibility reporting. Journal of Intellectual Capital.
Rouf, M. A., & Hossan, M. A. (2020). The effects of board size and board composition on CSR disclosure: a study of banking sectors in Bangladesh. International Journal of Ethics and Systems.
Salancik, G. R., & Pfeffer, J. (1978). A social information processing approach to job attitudes and task design. Administrative science quarterly, 224-253.
Saleh, M., Zulkifli, N., & Muhamad, R. (2011). Looking for evidence of the relationship between corporate social responsibility and corporate financial performance in an emerging market. Asia-Pacific Journal of Business Administration.
Sial, M. S., Chunmei, Z., Khan, T., & Nguyen, V. K. (2018). Corporate social responsibility, firm performance and the moderating effect of earnings management in Chinese firms. Asia-Pacific Journal of Business Administration.
Sial, M. S., Zheng, C., Cherian, J., Gulzar, M. A., Thu, P. A., Khan, T., & Khuong, N. V. (2018). Does corporate social responsibility mediate the relation between boardroom gender diversity and firm performance of Chinese listed companies? Sustainability, 10(10), 3591.
Siregar, S. V., & Bachtiar, Y. (2010). Corporate social reporting: empirical evidence from Indonesia Stock Exchange. International Journal of Islamic and Middle Eastern Finance and Management.
Ting, P. H. (2021). Do large firms just talk corporate social responsibility? -The evidence from CSR report disclosure. Finance Research Letters, 38, 101476.
Tunyi, A. A., Agyei-Boapeah, H., Areneke, G., & Agyemang, J. (2019). Internal capabilities, national governance and performance in African firms. Research in International Business and Finance, 50, 18-37.
Tziner, A., & Vardi, Y. (1983). Ability as a moderator between cohesiveness and tank crews’ performance. Journal of Occupational Behaviour, 137-143.
Valenti, A., & Horner, S. (2020). The human capital of boards of directors and innovation: an empirical examination of the pharmaceutical industry. International Journal of Innovation
Management, 24(06), 2050056.
Velte, P. (2019). Does board composition influence CSR reporting? A meta-analysis. Corporate Ownership & Control, 16(2), 48-59.
Waweru, N., Mangena, M., & Riro, G. (2019). Corporate governance and corporate internet reporting in sub-Saharan Africa: the case of Kenya and Tanzania. Corporate Governance: The international journal of business in society, 19(4), 751-773.
Published
2022-11-08
How to Cite
Yego, J., & Korir, M. (2022, November 8). Board Social Capital and Corporate Social Responsibility Reporting: A panel Study from Listed Kenyan Firms. African Journal of Education,Science and Technology, 7(2), Pg 122-133. https://doi.org/https://doi.org/10.2022/ajest.v7i2.793
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