Corporate Governance, Integrated Reporting and Environmental Disclosure: Evidence from the South African Context

Antonio Corvino, Federica Doni, Silvio Bianchi Martini
2020 Sustainability  
This research aims to investigate how the adoption of King III can affect the corporate governance model of a sample of South African listed companies on the Johannesburg Stock Exchange (JSE). Particularly, we analyzed the influence of sustainability-related issues of the board of directors (BDs) on firm environmental disclosure, after the mandatory preparation of integrated reporting (IR). In addition, we also examined indepth whether some corporate social policies are able to condition the
more » ... egoing disclosure. The empirical study covers the period from 2010 (the first-time adoption of IR in South Africa) to 2015 (the earliest year of the release process regarding King Code of Governance Principles for South Africa 2009 (i.e., King III)). Data were collected by the Bloomberg database. With reference to the BDs features, great attention was paid to both business ethics policy and CEO duality. Instead, with regard to corporate social issues, we looked into the adoption of the policies pertaining to health and safety and the respect for human rights. Following the mandatory preparation of IR, our findings show a positive relationship between business ethics policy and firm environmental disclosure. Contrarily, CEO duality does not exert any effect over the earlier type of corporate reporting. Furthermore, empirical evidence substantiates the association between health safety and human rights policies that are very crucial in an emerging economy, such as South Africa, and firm environmental disclosure. The rationale of such results arguably resides in compliance with King III. Therefore, this study can provide interesting insights, given that its mandatory adoption might reveal an important turning point in the development of corporate governance codes, as well as being a "driver" for potential enhancements of firm environmental disclosure, inter alia, in line with the Sustainable Development Goal (SDG) 12.6.
doi:10.3390/su12124820 fatcat:xsbn2ffkujh47dg7s6zjhef3qa