Corporate social reporting and board representation: evidence from the Kenyan banking sector

Abstract

The paper examines the influence of gender and board representation on communication of corporate social reporting by Kenyan banks. The descriptive statistical analysis reveals that the level of corporate social disclosure by Kenyan banks is low with a mean of 15%, indicating that disclosure of corporate governance information is not of primary concern to Kenyan banks. In particular, there is a complete lack of disclosure on the categories of Recruitments, Employment of Special Groups, Assistance to Retiring Employees, Employees Productivity and Turnover. The results of multiple regression analysis indicate that board representation can fundamentally improve corporate communication. A higher level of women representation and independent directors greatly improves disclosure.

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Notes

  1. 1.

    NEPAD is new initiative undertaken by African countries to address the challenges facing the continent such as, poverty, underdevelopment, peace and security. For further details see http://www.nepad.org/. APRM is a mutually agreed instrument to assess a member country on a number of socio-economic fronts.

  2. 2.

    Central Bank of Kenya requires all banks to separate the position and role of board chair and CEO, as well as establish board audit committee. Thus, due to the statutory requirements, variables such as board audit committee and board leadership structure are not considered in this study.

  3. 3.

    With respect to board oversight role, the Central Bank of Kenya risk management guidelines reads; “The board of directors carries the ultimate responsibility of approving and reviewing the credit risk strategy and credit risk policies of the bank. This role is part of the board’s ultimate responsibility of offering overall strategic direction of the bank” (p. 13).

  4. 4.

    While a total of 40 banks in the sample may appear low, they do represent the entire population facilitating the ease with which to make conclusions about the data.

  5. 5.

    As one referee points out, ostensibly while it appears greater disclosure occurs with more non-executive directors, it is possible that executive bank directors who give more posts to non-executive directors influence may actually be the ones influencing the levels of disclosures. Further research, particularly through a qualitative paradigm, may shed light on this possibility.

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Acknowledgements

The authors would like to thank three anonymous referees and the editor for their helpful comments.

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Correspondence to Dulacha G. Barako.

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Barako, D.G., Brown, A.M. Corporate social reporting and board representation: evidence from the Kenyan banking sector. J Manage Gov 12, 309 (2008). https://doi.org/10.1007/s10997-008-9053-x

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Keywords

  • Corporate social reporting
  • Kenya
  • Banks
  • Board representation