The impact of corporate governance on corporate social responsibility disclosure of uae listed banks

Abstract

The purpose of this study is to investigate the extent and trends of corporate social responsibility (CSR) disclosure of United Arab Emirates (UAE) listed banks, including conventional banks (CBs) and Islamic banks (IBs). Moreover, this study examines the impact of different corporate governance (CG) mechanisms, including the ownership structures (OWS) and the board of directors (BOD), on banks’ CSR disclosure. The CSR disclosure index includes four subitems: environmental information (ENV), human resource (HR), community (CMU), and products and services (PAS). A content analysis of banks’ annual reports from 2009 to 2019 was applied to investigate the CSR disclosure level by constructing a CSR disclosure index. Panel-data regressions were applied to analyze the impact of CG mechanisms on the overall CSR disclosure as well as on the separate ENV, HR, CMU, and PAS disclosures. The findings indicate that UAE listed banks, including CBs and IBs, show improving trends in CSR disclosure. Furthermore, BOD and OWS have a significant and positive relationship with CSR disclosure. The results varied across the two types of banking systems. The originality of this study is that it contributes to the existing literature by constructing a more comprehensive CSR disclosure index that includes more subitems referring to previous studies.This study contributes to the current literature by filling the gap related to the impact of CG mechanisms on the CSR disclosure of UAE banks and presents various implications such as managerial, social, environmental and economic implications . The study’s findings are exclusive to the banking industry in the UAE and should not be extended to other sectors due to differences in regulation and nature of the sector. The study solely looked at CSR disclosure in banks’ annual reports. Other communication channelsshould be considered in future studies. It would be beneficial to investigate the influence of other board of directors’ characteristics, such as experience, education, ageand other governance committees on banks’ CSR disclosure