The impact of family vs non-family governance contingencies on CSR reporting in Bangladesh

Abstract

Purpose Based on the socioemotional wealth (SEW) perspective and agency theory, the purpose of this paper is to examine how the introduction of the 2006 Corporate Governance (CG) Guidelines and family governance affected the level of the corporate social responsibility (CSR) reporting of non-financial companies in Bangladesh. Design/methodology/approach The authors use multivariate regression to analyse 2,637 firm-level annual observations, from 1996 to 2011 annual reports of Bangladeshi publicly listed non-financial-sector companies, to investigate how firm-level CG quality affects CSR disclosure in family and non-family firms. Findings CG quality significantly increases the level of CSR disclosure and this relationship is stronger prior to the new CG Guidelines. Family firms’ CSR reporting levels are significantly lower than non-family firms’, and this effect is stronger after the change in the CG Guidelines. CEO duality, the presence of an audit committee and profitability improve family-firm CSR reporting in Bangladesh, while non-family CSR disclosures are positively associated with board size and firm competition. Board independence is not related to CSR disclosure. Originality/value The authors provide evidence of the benefit of the CG Guidelines’ introduction on company CSR disclosure in an emerging economy and the importance of specific governance mechanisms that differentiate family and non-family-firm CSR disclosures in Bangladesh using a SEW framework.

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