Can Superior Sustainability Governance Improve Voluntary Corporate Social Responsibility Disclosure?

• In Event: Financial Statement Disclosure

Abstract

We examine the effectiveness of sustainability governance mechanisms in improving the transparency of voluntary corporate social responsibility (CSR) disclosure using text mining techniques. Our findings suggest that a firm with superior sustainability governance, e.g., a chief sustainability officer and an environmental related committee, is positively associated with the likelihood and frequency of voluntary CSR disclosure in its annual report. Those voluntary CSR disclosures also improve the perception of corporate sustainability reputation, evidenced by higher external CSR ratings. Collectively, our results support the notion that superior sustainability governance mechanisms are effective in enhancing firms’ voluntary sustainability reporting.

Authors

• Jun Guo, Rutgers University - Camden

• Chun K Hoi, Rochester Institute of Technology

• Rong Yang, Rochester Institute of Technology

• Yang Yu, Rochester Institute of Technology