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Board Flexibility in Diversity, Experienced CEOs and Corporate Sustainability Disclosure: Evidence from the Emerging Market

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Abstract

We examine the relationship between board flexibility in diversity, experienced CEOs and corporate sustainability disclosure (CSD) in the developing economy context. We utilised the annual reports of all the listed commercial banks in Bangladesh between 2016 and 2020. Our study found a positive and significant association between board flexibility in diversity, which includes independent directors, foreign directors, directors with a business background, accounting professional directors, experienced CEOs and CSD. Importantly, the strategic leadership role of experienced CEOs constructs a good boardroom environment for the diversified board to place more emphasis on stakeholders’ interests and business legitimacy in a developing economy. However, we found a negative relationship between directors with a law background and CSD in the developing economy context, perhaps their role might be positive where a regulative environment exists for corporate sustainability disclosure. Our study was controlled by the audit committee and sustainability committee, and we found that the sustainability committee had a positive and significant association with CSD. Our findings have implications for developing economies specifically and around the globe in general.

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Authors and Affiliations

  1. Peter Faber Business School, Australian Catholic University, North Sydney, NSW, 2060, Australia

    Sohel Mehedi & Md Akhtaruzzaman

  2. Department of Accounting and Information Systems, University of Rajshahi, Rajshahi, 6205, Bangladesh

    Sohel Mehedi & Md. Maniruzzaman

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  1. Sohel Mehedi
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  2. Md. Maniruzzaman
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  3. Md Akhtaruzzaman
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Correspondence to Sohel Mehedi.

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Appendix A: Corporate Sustainability Disclosure (CSD) Framework

Appendix A: Corporate Sustainability Disclosure (CSD) Framework

Key Point

 

Items

Economic Sustainability Disclosure (s)

1

Contribution to national exchequer

2

Contribution to national economy

3

Information related to retained earnings

4

Information related to capital structure

5

Information related to financial performance

6

Information related to dividend policy

7

Information related to employee compensation

8

Expenditure on CSR/ sustainability activities

9

Remittance collection information

10

Information related to economic value added

11

Impacts on local economy

12

Impacts on global economy

Environmental Sustainability Disclosure (S)

13

Information related to environmental policy and strategy

14

Information related to green financing

15

In-house green decoration/practices

16

E-banking, mobile banking, fin-tech

17

Information related to energy consumption

18

Initiatives to reduce energy consumption

19

Energy and resource efficiency

20

Investing in renewable energy

21

Compliance with environmental regulations

22

Investing in waste recycling/treatment plant

23

Investing in liquid waste management

24

Investing in solid waste management

25

Investing in green agriculture

26

Financing in green/clean transportation projects

27

Financing in Sand-witch Panel

28

Financing in Govt. approved eco-tourism projects

29

Financing in water management and conservation

30

Financing in environment-friendly brick kiln

31

Aiding environmentally friendly programmes, seminar, symposium

32

Initiatives to reduce greenhouse gas emissions

33

Climate change risks mitigation strategies

34

Climate change adaptation measure

35

Tree plantation programme

36

Donate to protect ecological diversity

Social Sustainability Disclosure (s)

37

Contribution to community development

38

Contribution to educational sector

39

Contribution to health sector

40

Contribution to national food programmes

41

Contribution to women empowerment

42

Contribution to disabled person, children, and freedom fighters

43

Contribution to poor and under-privileged people

44

Credit facilities for women entrepreneurs

45

Credit facilities to marginal farmers

46

Sponsoring sports and cultural events

47

Supporting and financing arts and culture

48

Donation to prime minister’s relief fund

49

Donation to philanthropic and charitable organisations

50

Donation to climate change affected people

51

Supporting research and development

52

Participation in protecting human rights

53

Protecting workers/employee’s rights and freedom

54

Employee retention policy

55

Customer satisfaction

56

Anti-corruption measures

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Mehedi, S., Maniruzzaman, M. & Akhtaruzzaman, M. Board Flexibility in Diversity, Experienced CEOs and Corporate Sustainability Disclosure: Evidence from the Emerging Market. Glob J Flex Syst Manag 25, 261–282 (2024). https://doi.org/10.1007/s40171-024-00387-y

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