Board’s financial expertise and corporate social responsibility disclosure in China

This study aims to investigate the impact of the board’s financial expertise (BFE) on corporate social responsibility (CSR) disclosure in China.

Using a sample of Chinese listed firms from 2009-2016 (making 3272 firm-year observations), this study uses the generalized method of moments (GMM) and panel data estimation techniques.

Using the resource dependence theory, the findings of this study are twofold. First, the is positively associated with the disclosure level of CSR. Second, this positive impact is more pronounced in firms with female CEO and state ownership. The findings are robust to the potential issues of endogeneity and sensitivity analyses.

Practically, the findings hold value for the senior management of Chinese firms to ensure the presence of financial experts in boards to yield both financial and non-financial outcomes.

This study points out how financial experts on boards influence the societal outcomes via disclosure of CSR. Financial experts encourage participation in social and sustainable practices which creates a positive image of the firm not only in the eyes of society but also for investors.

This study is unique and contributes to the extant literature by examining the impact of a new attribute, i.e. the BFE on the level of CSR disclosure in China.