Board Attributes and Companies’ Choice of Sustainability Assurance Providers

• In Event: CSR and Sustainability

Abstract

We examine the international sustainability assurance market, identifying key determinants of companies’ choice for sustainability report assurance providers. Specifically, we investigate the association between several board attributes, as well as country-level variables, and companies’ choice of assurance provider, using a refined classification of the type of assurance providers. Our sample includes companies from 54 countries, and we analyze the period 2010 to 2017. The results provide evidence that corporate governance, industry, and country-level considerations are all relevant, not just for the decision to assure the sustainability reports, but also for the choice of assurance provider. In stakeholder-oriented countries, the probability of assurance of the report is significantly higher, and the firms have a higher tendency to choose a Big 4 firm as the assurer. Moreover, the probability of choosing a Big 4 firm is higher in firms with (i) larger boards, (ii) CEO-chairman separation, and (iii) a higher percentage of women on the board. Finally, results indicate that firms in the mining and finance industries prefer a Big 4 assurer, while firms in the production industry are more likely to choose an engineering firm or an expert, and utility firms prefer an expert to assure their sustainability reports.

Authors

• Kholod Alsahali, Norwich Business School - University of East Anglia

• Ricardo Malagueno, University of Essex

• Ana Cristina Marques, Norwich Business School - University of East Anglia