The Effect of Corporate Governance Mechanisms on Social Responsibility Disclosure

Abstract

The aim of this study was to investigate the relationship between some of the corporate governance mechanisms on social responsibility disclosure. To measure the level of corporate social responsibility information disclosure, according to the research of Nirwanto et al. (2010), a checklist containing 35 types of environmental and social information which were expected to be disclosed voluntary or mandatory in the annual report was developed. The total number of disclosed expressions in any disclosure subgroups represents environmental and social information disclosure level of the company. This paper uses panel data and is tested based on generalized regression method (PGLS model). The data is based on information released by companies listed in Tehran Stock Exchange between 2009 and 2014, and the sample includes 128 companies. The results of this research show a significant relationship between the three mechanisms of corporate governance, including institutional owners, the proportion of non-executive board of directors as well as the size of the board, and the level of social responsibility disclosure. In addition, no significant relationship was found between the auditor size and the level of social responsibility disclosure. Paying attention to social responsibility reporting as a proxy to increase the social role of business units and their growing presence in environmental activities and participation in social and economic development programs, is the most important achievement of this article.

DOI: 10.5901/mjss.2016.v7n4S2p139