The joint effect of board independence and CSR committee on CSR disclosure: Evidence from Italian listed companies

Sustainability has become one of the key hubs around which the actions conducted by international economic operators revolve. This new perspective, which could perhaps be better defined as a “requirement” given its specific weight in the global context, requires an analysis of firms’ behaviours with regard to sustainability disclosure and the corporate governance (CG) mechanisms influencing the information released. Board of directors and CSR committee are critical CG mechanisms in that sense. This paper aims at investigate the relationship between specifics board characteristics and corporate social responsibility (CSR) disclosure. More specifically, the study investigates the relation between board independence and CSR disclosure, and how this relationship is moderated by the presence of a CSR Committee. The analysis has been conducted on a sample of Italian non-financial listed company. The results obtained show the existence of a positive and significant relationship between board independence and CSR disclosure. Moreover, the findings reveal that the presence of a CSR Committee positively moderates previous relationship, showing the complementary role played by board independence and CSR committee. These results have critical implications for boards, managers, regulators and policy makers operating to define the better corporate governance mechanisms, highlighting the importance of the joint effect of board independence and CSR committee in improving firm’s CSR disclosure practices. Our study also has relevant implications for researchers. It demonstrated the relevant need to study the complementary effects of different CG mechanisms, rather that the single effect, in influencing CSR disclosure. In this sense, it can give a contribution in explaining the divergent empirical results scholars highlighted about the effectiveness of board independence in stimulating CSR disclosure, showing the way to solve the dilemma about the effectiveness of board independence: it is a better CG mechanism when other CG mechanisms are in place, i.e. the CSR committee.