Firm ownership and board characteristics: Do they matter for corporate social responsibility disclosure of Indian companies?

This paper aims to examine whether the extent and type of corporate social responsibility (CSR) disclosures made by Indian public listed companies are associated with firm ownership and board characteristics.

Data analysis is based on the top 100 companies listed on the Bombay Stock Exchange (2007-2011) using a 17-item CSR disclosure measure.

The extent of CSR disclosure is positively associated with foreign ownership, government ownership and board independence and negatively associated with CEO duality. Promoter ownership has a negligible effect on the extent of CSR disclosure. In terms of the type of CSR disclosure, community information increases with government ownership and board independence, while environmental information expands with foreign ownership and board independence. Information on employees/human resources has a positive association with foreign ownership but decreases with CEO duality. The amount of product and services information increases with promoter ownership, foreign ownership and board independence and CEO duality.

Given the positive impact independent directors have on the extent of CSR disclosure, their role can be further strengthened in terms of overseeing quality of information disclosed. Stakeholders and regulators will need to develop greater awareness of firm CSR disclosure biases associated with ownership and more carefully scrutinize firm CSR activities that firms are “not” reporting on.

Empirical evidence on the link between corporate governance and CSR disclosure from a developing nation context is limited. This paper provides much needed evidence in this area from India – one of the largest, rapidly developing economies in the world.