The role of firm-level CSR governance characteristics as a driver of comprehensive CSR reporting – the moderating role of profitability

Abstract

Purpose

This study aims to examine the impact of firm-level corporate social responsibility (CSR) governance characteristics on the extent, quality and comprehensiveness of CSR reporting of Pakistani listed enterprises.

Design/methodology/approach

This study used content analysis of corporate annual reports and stand-alone CSR reports available on corporate websites in 2021 to identify CSR-related governance features and to calculate CSR reporting scores. Multivariate regression is used to test relationships. In addition, the analysis tested the moderating role of profitability in these relationships.

Findings

Firm-level CSR governance characteristics contribute to the extent, quality and comprehensiveness of CSR reporting in a developing country. Further, results confirm that profitability moderates the relationship between CSR governance and the extent and comprehensiveness of CSR reporting.

Research limitations/implications

This study employed cross-sectional data and focused on a single developing country. Future studies might include a cross-national sample and longitudinal data to demonstrate the broader relevance of these findings. The outcomes of this study are restricted to CSR disclosures based on CSR reports and annual reports. Future research may examine additional corporate communication channels, such as websites and social media platforms.

Practical implications

This research validates the important role of CSR governance mechanisms as a driver of comprehensive CSR reporting. Business leaders and policymakers can facilitate improved corporate reporting by requiring companies to implement CSR-related governance mechanisms.

Originality/value

This is the first study to test the influence of firm-level CSR governance mechanisms in promoting the quantity, quality and comprehensiveness of CSR reporting in a developing country.

Citation

Ali, W., Wilson, J., Elalfy, A. and Ismail, H. (2024), "The role of firm-level CSR governance characteristics as a driver of comprehensive CSR reporting – the moderating role of profitability", Journal of Applied Accounting Research, Vol. 25 No. 5, pp. 943-977. https://doi.org/10.1108/JAAR-12-2022-0343