By Chutimant Boonnual
Year 2016
Abstract
The purposes of this study were to investigate the relationships among corporate governance, Corporate Social Responsibility (CSR) disclosure, and the performance of the companies under public company limited categories listed in Thailand using a stakeholder theory perspective. Likewise, this paper investigated mediation effects of CSR disclosure from corporate governance to firm performance.
CSR has become a strategic agenda for business these days. CSR disclosure practices have been developed over the last three decades in the area of financial reporting. In Thailand, most of the CSR concepts and principles were developed based on the framework of developed countries, however, CSR still remains a voluntary mechanism. The application of CSR disclosure in Thailand is still in embryonic form. Thus, this the main purpose of this study to investigate the determinants and consequences of CSR disclosure by analyzing corporate governance and firm performance in the year 2014. To investigate such relationship, a CSR checklist was developed to identify CSR practices in Thai listed companies. In developing a CSR checklist, the published annual reports were analyzed for the sequence of CSR practices. A classification process was utilized to develop an index based on six dimensions as follows: employee, customer, investor, community, environment and supplier. CSR disclosure was then analyzed and examined using content analysis. After that, data was collected from the publicly available annual reports of public firms in Thailand with a total number of 382 samples. Finally, data analysis was conducted using structural equation modelling.
The statistical results from confirm factor analysis revealed that all six dimensions were appropriate measurements of CSR disclosure. Also, the study revealed that disclosure of corporate CSR data in Thailand from different industries have different disclosure levels. The empirical results showed positive relationships among the following: a) institutional ownership, government ownership and board independence and CSR disclosure, b) CSR disclosure and firm performance and c) both return on asset (ROA) and return on equity (ROE). However, board independence has a negative relationship with ROA and ROE, while government ownership has a positive relationship with only ROE. Thus, CSR disclosure, institutional ownership, government ownership and board independence were the main factors identified in the firms’ performance. The model also identified several mediating relationships of CSR disclosure between corporate governance variables and measures of firm financial performance. In conclusion, CSR disclosure has complete mediation from institutional ownership to firm performance and there was a partial mediation from board independence to firm performance. For government ownership, CSR disclosure has a complete mediation to ROA, but partial mediation to ROE.