Corporate governance as a determinant of sustainability compliance and sustainability assurance"
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2019-06-26
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en
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In the absence of extensive mandatory regulation and assurance, this study investigates whether and to what extent internal and external corporate governance mechanisms effectively incentivize an organization’s management to choose for compliance with generally accepted sustainability reporting standards and independent third-party assurance on sustainability disclosures as useful instruments to reduce the agency problems caused by asymmetric information, conflicting interests and opportunistic behavior. Since effective corporate governance and corporate sustainability performance (CSP) are interrelated, we made a distinction between direct and indirect effects of the focal corporate governance mechanisms on sustainability compliance and assurance. Based on a worldwide sample of organizations that, during the period of 2013-2017, voluntarily disclosed corporate sustainability reports, the results of our multilevel (logit) regression models show that the active engagement of stakeholders (including specific types of institutional investors) and the presence of sustainability expertise play a significant incremental role in explaining the variation in sustainability compliance and assurance practices. More specific, the active engagement of stakeholders, including institutional investors, and the presence of sustainability experts in organizational decision-making leads to improved corporate sustainability performance and, consistent with signaling theory, ultimately reduces the information asymmetry because more credible and reliable sustainability information is disclosed
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Faculteit der Managementwetenschappen