HOW BOARD CHARACTERISTICS INFLUENCE CSR ASSURANCE AND REPORTING QUALITY

Abstract

Firms focus more and more on their environmental and social impact. Through corporate social responsibility (CSR) reporting firms disclose their CSR performances. To reduce the information asymmetry between the firm and its stakeholders, firms obtain assurance over their CSR reportings. As many previous studies have shown, obtaining assurance improves CSR reporting quality. This study tries to get better insight in how and why assurance improves CSR reporting quality by obtaining board characteristics as moderating variable. Through the framework of Fernando and Lawrence (2014) this study examines how board characteristics and board interlocks might influence the relationship between assurance and CSR reporting quality. For the dependent variable, this study uses Refinitiv’s (2020) Environmental, Social and Governance (ESG) score. The results of the random effects analyses show that only board interlocks have a significant influence on the relationship between external assurance and CSR reporting quality.

Keywords: CSR reporting quality, assurance, board characteristics, board interlocks, ESG score