The effect of corporate governance and the institutional context on sustainability assurance
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2020-07-08
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en
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Companies are increasingly hiring independent external assurance on sustainability reports. However, in the absence of mandatory regulation, there is a wide variety of choices possible. After adoption, assurance practices may vary in respect of the assurance provider, the scope and level of assurance and the use of an assurance standard. This study investigates if differences in corporate governance mechanisms or the institutional context are able to explain this variety. In addition this study will explore the role of corporate governance mechanisms and the institutional context on the relation between sustainability performance (CSP) and assurance on the sustainability reports (CSRA). The corporate governance mechanisms included in this study are board monitoring effectiveness as an internal and stakeholder engagement as an external mechanism. The institutional context includes on an industry-level whether the industry is environmental or social sensitive and on a country-level the stakeholder orientation. Using multilevel logistic regression models on a worldwide dataset of 3560 firm-year observations for the period 2013-2017 the results show that companies that engage with stakeholders and companies in environmental sensitive industries or stakeholder oriented countries are more likely to have their sustainability reports assured. Companies in social sensitive industries are less likely to adopt sustainability assurance.
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Faculteit der Managementwetenschappen