Board Diversity, Corporate Governance Mechanism And Corporate Social Responsibility Disclosure Of Jordanian Listed Companies

Corporate social responsibility (CSR) disclosure is an important issue in contemporary accounting research due to the increased demand of such information by stakeholders, especially investor. This thesis assesses the extent of CSR disclosure in the annual reports of Jordanian listed companies. More importantly, this thesis seeks to investigate the relationship between corporate governance mechanisms and board diversity characteristics with the level of CSR disclosure. Additionally, it examines whether the impact of these factors on CSR disclosure is moderated by board size. This thesis used a sample of 117 Jordanian companies chosen from the first and second markets of the Amman Stock Exchange (ASE) for the 2007-2011 period. The CSR disclosure is measured by the number of sentences as well as in terms of disclosure index score. The results of panel data analysis show an improvement in the level of CSR disclosure by Jordanian companies. The result also indicates that the amount of CSR disclosed is high while the natures of disclosure items are rather moderate. Disclosure about employee information were found to be the most common theme disclosed over the study period, but what is surprising is that Islamic CSR information was only disclosed by one company. This theme was found to be the lowest among all themes studied. Results also revealed a positive and significant association between the level of CSR disclosure and four variables (women directors, foreign board members, independent directors and audit committee). In contrast, no significant association was found between young directors, family members on the board, multiple directorships, and CEO duality with the level of CSR disclosure. Interestingly, the result of moderating effect analysis indicated that board size has a significant moderating effect on the relationship between (CEO duality, audit committee and multiple directorships) and the level of CSR disclosure. The findings of this study are important for Jordanian policymakers and regulators especially concerning the importance of corporate governance regulations and board diversity for improving the CSR activities of the sampled companies. Policy makers and regulatory bodies in Jordan should focus on how to enhance and strengthen corporate governance regulations. Additionally, policymakers in Jordan and in other Arab countries should implement quotas for women in the boardroom. This will increase the participation of women in the decision making process of companies whilst also reducing gender bias.