The Impact of Board of Directors' Independence on Corporate Social Responsibility Disclosure in Palestinian Companies


Total Views: 103

Authors

  • Omar Tarda Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Nilai, Negeri Sembilan, Malaysia. https://orcid.org/0009-0007-0631-4544
  • Hasnah Haron Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Nilai, Negeri Sembilan, Malaysia.
  • Nathasa Mazna Ramli Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Nilai, Negeri Sembilan, Malaysia.
  • Supiah Salleh Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Nilai, Negeri Sembilan, Malaysia. https://orcid.org/0000-0003-2929-0841

DOI:

https://doi.org/10.33102/jmifr.551

Keywords:

Palestine, board of directors’ independence and corporate social responsibility disclosure.

Abstract

Corporate social responsibility (CSR) is a comprehensive approach of the company that determines the amount of the organisation's contribution to society and the use of its available resources in a responsible manner. Previous statistics have shown that the contributions of Palestinian companies towards social issues are still limited, and corporate social responsibility disclosure (CSRD) is at a low level. This paper aims to examine the level of CSRD of Palestinian companies and to examine the relationship of   board of directors’ (BOD) independence on CSRD. The study employs OLS linear regression analysis to analysis of data using a sample of 31 companies listed on the Palestine Stock Exchange (PSE) during the period from 2012 to 2021. The theoretical framework of agency theory will be adopted to comprehend the relationship between the variables under investigation. The findings reveal that the level of CSR disclosure  in Palestinian companies included in the sample of study is 29.5%.The results of the study also, indicated that the   positive and significant relationship between BOD independence and CSRD.

Downloads

Download data is not yet available.

References

Adnan, S. M., Hay, D., & van Staden, C. J. (2018). The influence of culture and corporate governance on corporate social responsibility disclosure: A cross country analysis. Journal of Cleaner Production, 198, 820-832.

Akbar, M., Hussain, S., Ahmad, T., & Hassan, S. (2020). Corporate governance and firm performance in Pakistan: Dynamic panel estimation.

Alia, M. A., & Barham, O. (2020). The Effect of Earnings Management and Corporate Governance on the Relationship between Corporate Social Responsibility Disclosure of Companies Listed on Palestine Exchange (PEX) and the Value of the Company. An-Najah University Journal for Research-B (Humanities), 36(11), 2313-2358.

Alia, M. A., & Mardawi, Z. (2021). The impact of ownership structure and board characteristics on corporate social responsibility disclosed by Palestinian companies.‏

Barakat, F. S., Lopez Perez, M., & Rodríguez Ariza, L. (2015). Corporate social responsibility disclosure (CSRD) determinants of listed companies in Palestine (PXE) and Jordan (ASE). Review of Managerial Science, 9(4), 681-702.‏

Barako, D. G., & Brown, A. M. (2008). Corporate social reporting and board representation: evidence from the Kenyan banking sector. Journal of management & governance, 12, 309-324.

Beji, R., Yousfi, O., Loukil, N., & Omri, A. (2021). Board diversity and corporate social responsibility: Empirical evidence from France. Journal of Business Ethics, 173, 133-155.

Bertoni, F., Meoli, M., &Vismara, S. (2014). Board independence, ownership structure and the valuation of IPOs in continental E urope. Corporate Governance: An International Review, 22(2), 116-131.

Bhatia, A., & Makkar, B. (2020). CSR disclosure in developing and developed countries: a comparative study. Journal of Global Responsibility, 11(1), 1-

Bhattacharya, C. B., Sen, S., & Korschun, D. (2008). Using corporate social responsibility to win the war for talent. MIT Sloan management review, 49(2).‏

Brown, H. (2011). Global reporting initiative. Handbook of Transnational Governance: Institutions & Innovations, Polity Press, Cambridge, UK, 281-289.

Croci, E., Hertig, G., Khoja, L., & Lan, L. L. (2020). The Advisory and Monitoring Roles of the Board-Evidence from Disruptive Events. European Corporate Governance Institute–Finance Working Paper, (673).

Cuadrado-Ballesteros, B., García-Sánchez, I. M., &Martínez-Ferrero, J. (2017). The impact of board structure on CSRD practices on the international scale. European Journal of International Management, 11(6), 633-659.

Cucari, N., Esposito de Falco, S., & Orlando, B. (2018). Diversity of board of directors and environmental social governance: Evidence from Italian listed companies. Corporate Social Responsibility and Environmental Management, 25(3), 250-266.‏

De Villiers, C., Naiker, V., & Van Staden, C. J. (2011). The effect of board characteristics on firm environmental performance. Journal of Management, 37(6), 1636-1663.

Dias, A., Lima Rodrigues, L., & Craig, R. (2017). Corporate governance effects on social responsibility disclosures.Australasian Accounting, Business and Finance Journal, Volume 11 | Issue 2.

Esa, E., & Ghazali, N. A. M. (2012). Corporate social responsibility and corporate governance in Malaysian government‐linked companies. Corporate Governance: The international journal of business in society.‏

Fama, E. F., & Jensen, M. C. (1983). Agency problems and residual claims. The journal of law and Economics, 26(2), 327-349.

Gallego‐Álvarez, I., &Pucheta‐Martínez, M. C. (2020). Corporate social responsibility reporting and corporate governance mechanisms: An international outlook from emerging countries. Business Strategy & Development, 3(1), 77-97.

Gorondutse, A., & Hilman, H. (2012). The influence of Business Social Responsibility (BSR) on Organizational Performances: A pilot Study. Int J Bus [Internet].

Habbash, M., & Haddad, L. (2020). The impact of corporate social responsibility on earnings management practices: evidence from Saudi Arabia. Social Responsibility Journal, 16(8), 1073-1085.

Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of accounting and public policy, 24(5), 391-430.

Hassan Al-Tamimi, H. A. (2014). Corporate social responsibility practices of UAE banks. Global Journal of Business Research, 8(3), 91-108.‏

Huynh, Q. L. (2019). Intervention of Corporate Social Responsibility between Financial Effectiveness and Corporate Governance. Indian Journal of Science and Technology,12(13), 1-9

Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. the Journal of Finance, 48(3), 831-880.

Jizi, M. I., Salama, A., Dixon, R., &Stratling, R. (2014). Corporate governance and corporate social responsibility disclosure: Evidence from the US banking sector. Journal of business ethics, 125(4), 601-615.

Johnson, R. A., & Greening, D. W. (1999). The effects of corporate governance and institutional ownership types on corporate social performance. Academy of management journal, 42(5), 564-576.

Kamla, R. (2007). Critically appreciating social accounting and reporting in the Arab MiddleEast: A postcolonial perspective. Advances in International Accounting, 20, 105-177.

Katmon, N., Mohamad, Z. Z., Norwani, N. M., & Al Farooque, O. (2019). Comprehensive board diversity and quality of corporate social responsibility disclosure: evidence from an emerging market. Journal of business ethics, 157(2), 447-481.

Li, Q., Luo, W., Wang, Y., & Wu, L. (2013). Firm performance, corporate ownership, and corporate social responsibility disclosure in C hina. Business Ethics: A European Review, 22(2), 159-173.

Lone, E. J., Ali, A., & Khan, I. (2016). Corporate governance and corporate social responsibility disclosure: evidence from Pakistan. Corporate Governance: The international journal of business in society. Vol. 16 No. 5, pp. 785-797

Mardawi, Z. M., & Saed, M. (2018). The Reality of Disclosure in Palestinian Corporate Social Responsibility (CSR) and Relationship with the Structure of Ownership and Characteristics of the Board of Directors (Doctoral dissertation, An-Najah National University).

Michelon, G., &Parbonetti, A. (2012). The effect of corporate governance on sustainability disclosure. Journal of management & governance, 16(3), 477-509.

Mobbs, S. (2013). CEOs under fire: The effects of competition from inside directors on forced CEO turnover and CEO compensation. Journal of Financial and Quantitative Analysis, 48(3), 669-698.

Musallam, S. R. (2018). The direct and indirect effect of the existence of risk management on the relationship between audit committee and corporate social responsibility disclosure. Benchmarking: An International Journal, 25(9), 4125-4138.

Nwude, E. C., & Nwude, C. A. (2021). Board structure and corporate social responsibility: evidence from developing economy. SAGE Open, 11(1), 2158244020988543.

Orazalin, N. (2019). Corporate governance and corporate social responsibility (CSR) disclosure in an emerging economy: evidence from commercial banks of Kazakhstan. Corporate Governance: The International Journal of Business in Society.

Palestinian Code of Corporate Governance (PCCG) (2009) Retrieved from: http://www. hawkama.ps/Pages/Comp_Gov_Page.aspx

Post, C., Rahman, N., & Rubow, E. (2011). Green governance: Boards of directors’ composition and environmental corporate social responsibility. Business & society, 50(1), 189-223.

Rashid, A. (2018). The influence of corporate governance practices on corporate social responsibility reporting. Social Responsibility Journal, 14(1), 20-39.

Saleh, M. W., Zaid, M. A., Shurafa, R., Maigoshi, Z. S., Mansour, M., & Zaid, A. (2021). Does board gender enhance Palestinian firm performance? The moderating role of corporate social responsibility. Corporate Governance: The International Journal of Business in Society.

Sun, M., Nagata, K., & Onoda, H. (2011). The investigation of the current status of socially responsible investment indices. Journal of Economics and International Finance, 3(13), 676.

Turshan, M. N., Karim, N. A., & Ramallah, P. (2020). The effect of adopting Balanced Scorecard (BSC) as strategic planning tool on financial performance of banks operating in Palestine. Asian Social Science, 16(1), 95-108.

Visser, W. (2008). Corporate social responsibility in developing countries.

Waheed, A., & Malik, Q. A. (2021). Institutional Ownership Board Characteristics and Firm Performance: A Contingent Theoretical Approach. International Journal of Asian Business and Information Management (IJABIM), 12(2), 1-15.

Zahra, S. A., & Pearce, J. A. (1989). Boards of directors and corporate financial performance: A review and integrative model. Journal of management, 15(2), 291-334.

Zaid, M. A., Wang, M., & Abuhijleh, S. T. (2019). The effect of corporate governance practices on corporate social responsibility disclosure: Evidence from Palestine. Journal of Global Responsibility.‏

Published

2023-12-01
CITATION
DOI: 10.33102/jmifr.551
Published: 2023-12-01

How to Cite

Tarda, O., Haron, H., Ramli, N. M., & Salleh, S. (2023). The Impact of Board of Directors’ Independence on Corporate Social Responsibility Disclosure in Palestinian Companies. The Journal of Muamalat and Islamic Finance Research, 20(2), 192-204. https://doi.org/10.33102/jmifr.551

Issue

Section

Regular Issues