Corporate governance and corporate social disclosures: a meta-analytical review

• Date: 02 October 2017
• Pages: 434-458
• Published date: 02 October 2017
• DOI: https://doi.org/10.1108/IJAIM-01-2017-0005
• Author: Md. Tofael Hossain Majumder,Aklima Akter,Xiaojing Li
• Subject Matter: Accounting & Finance,Accounting/accountancy,Accounting methods/systems

Corporate governance and

corporate social disclosures:

a meta-analytical review

Md. Tofael Hossain Majumder

Donlinks School of Economics and Management,

University of Science and Technology Beijing, China

and Department of Accounting and Information Systems,

Comilla University, Comilla, Bangladesh

Aklima Akter

Business School, University of International Business and Economics,

Beijing, China, and

Xiaojing Li

Donlinks School of Economics and Management,

University of Science and Technology Beijing, China

Abstract

Purpose –This study aims to investigate the association between corporate governance and corporate

social disclosures(CSD).

Design/methodology/approach –Data analysis has been conducted on 29 prior studies published

between 2004 and 2016 for thepurpose of integrating the f‌indings across studies. Thestudy uses the meta-

analysisinstrument developed by Hunter et al. (1982).

Findings –The investigation f‌inds a signif‌icantpositive association between board size, the frequencyof

board meetings and auditors’credibilitywith CSD. Both the managerial and concentrated ownershiphave a

signif‌icant but negative association with CSD. In contrast, board independence, board gender diversity, the

composition of non-executive directors, government ownership, foreign ownership and institutional

ownership are insignif‌icantlyand positively associated with CSD. CEO duality is also insignif‌icantwith CSD

but indicatesa negative association. The study furtherinvestigates that the association betweenboard gender

diversityand CSD affected by the differences of the country of study.

Originality/value –This paper adds signif‌icance to the extantacademic literature as well as assists the

appropriate policymaker in assessing the determinants of CSD from the viewpoints of corporategovernance.

It further aims to reconcile the f‌indingsof the previous studies around the world, and also for the developed

and developingcountries separately.

Keywords Corporate social responsibility, Corporate governance, Meta-analysis, Disclosures

Paper type Literature review

1. Introduction

Due to several corporatescandals (for example, Enron, Ahold, WorldCom, Lehman Brothers

and Parmalat), recent f‌inancial crisis and changing the mix of the business environment

with the rising demand from various stakeholders have brought more devotion to the

corporate governance (CG) and corporatesocial disclosures (CSD). CG and social disclosures

are related to each other (Haniffa and Cooke, 2005;Said et al., 2009;Kathy Rao et al.,2012).

IJAIM

25,4

434

Received27 January 2017

Revised5 March 2017

Accepted13 April 2017

InternationalJournal of

Accounting& Information

Management

Vol.25 No. 4, 2017

pp. 434-458

© Emerald Publishing Limited

1834-7649

DOI 10.1108/IJAIM-01-2017-0005

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/1834-7649.htm

CG ensures the interest of the shareholders, and it plays a vital role to the corporate

accountability by disclosingsocial issues (Hossain and Alam, 2016). Dellaportas et al. (2012)

f‌ind that if the disclosure level ofthe organization increases, then it will create advantages

for that organization. As a result,every company should disclose their economic, social and

environmental activities to their valuable stakeholders (Said et al., 2009). The meaning of

corporate social responsibility (CSR) and CSD differ in the context of various stakeholder

groups and companies around the world(Dawkins and Lewis, 2003;Igalens and Gond, 2005;

Welford et al.,2008). As a country, USA is the pioneer in the arena of CSR and CSD

(Giannarakis, 2014b), and companies in that country still meet the desires of their

shareholders by providing CSD as a voluntary disclosure (Tschopp, 2005;Rodríguez and

LeMaster, 2007). The evidence shows that a number of studies connected to CSD have

investigated in the developed and developing countries. But, much of the evidence of

previous literature provides qualitative descriptions regarding the nature, contents and

motivational factors of CSD (McWilliams and Siegel, 2001;Newson and Deegan, 2002;

Campbell, 2007;Van Beurdenand Gössling, 2008;Uzma, 2016;Neu et al.,1998;Dowling and

Pfeffer, 1975;Teoh and Thong, 1984;Guthrieand Parker, 1989;Andrew et al.,1989;Guthrie

and Parker, 1990;Roberts, 1992;Patten,1992;Clarkson, 1995;Donaldson and Preston, 1995;

Deegan and Gordon, 1996;Adams et al.,1998,1995;Deegan and Rankin, 1997). In the

existing literature, a microscopic research has been performed on the determinants of CSD

as well (Hackston and Milne, 1996;Alnajjar, 2000;Naser et al., 2006;Hawani Wan Abd

Rahman et al.,2011;Giannarakis, 2013;Muttakin and Khan, 2014;Giannarakis, 2014b;

Barakat et al.,2015;Alotaibiand Hussainey, 2016;Nurhayati et al.,2016).

Moreover,relativelyless devotionhas been givento set up a direct linkbetween CG and CSD

(Khan et al., 2013;Razak and Mustapha, 2013;Suf‌ian and Zahan, 2013;Giannarakis, 2014a;

Kiliç et al.,2015;Desc hênes et al.,2015;Majeed et al., 2015;D.Sundarasen et al.,2016;Dunn and

Sainty, 2009;Ibrahimand Hanefah,2016;Rashid and Lodh,2008;Mohd Ghazali,2007).

The empirical f‌indings of the previous literature in connection to CG and CSD provide

inconclusive results. For example, Dunn and Sainty(2009) and Ibrahim and Hanefah (2016)

provide evidence that board independencehas a signif‌icant impact on CSD. In contrast, Lim

et al. (2008) and Razak and Mustapha (2013) suggest no signif‌icant impact of board

independence on CSD. Besides that, Javaid Lone et al. (2016) documented that there is a

signif‌icant link between board size and CSD. However, Razak and Mustapha (2013) show

the insignif‌icant relationship between board size and CSD. In addition, Majeed et al. (2015)

f‌ind that board gender diversity has a signif‌icant impact on CSD. On the other hand,

D.Sundarasen et al. (2016) provide evidencethat no signif‌icant impact exists between board

gender diversity and CSD.

Contrary to previous f‌indings stated above,our study aims to address the meta-analysis

technique for f‌inding out the links between the CG and CSD. In this context, this paper

synthesizes 29 previous studies by using themeta-analysis technique developed by Hunter

et al. (1982) to give a fruitful result on the CG and CSD relationship.

A social science researcheris more devoted to the use of the meta-analysis technique but

a researcher in the f‌ield of accounting may f‌ind limited applicationof this technique (Eddine

et al., 2015;Khlif and Souissi,2010;Ahmed and Courtis, 1999). To the best of our knowledge,

no prior studies examined the associationbetween CG and CSD by using the meta-analysis

technique. Hence, this study contributes to the contemporary literature to f‌ill this research

gap. Furthermore, the f‌indings of the investigation present a combined result of the prior

studies covering different countries, therebyproviding a better understanding to assess the

determinants of CSD. Moreover,this meta-analysis technique adds contributionsnot only in

the accounting researcharena but also other areas of research.

Corporate

social

disclosures

435