The Influence of Board Characteristics on Sustainability Reporting: Empirical Evidence from Sri Lankan Firms

Abstract

Purpose – Drawing on agency theory and legitimacy theory perspectives, the purpose of this paper isto investigate the influence of board characteristics on sustainability reporting of listed companies inthe Colombo Stock Exchange (CSE), Sri Lanka.Design/methodology/approach – A sample of 148 listed companies was drawn from the CSE usingstratified random sampling method and data were collected from the 2012 annual reports. Theproposed hypotheses were tested using a hierarchical binary logistic regression.Findings – This study documents that board size and dual leadership are positively associatedwith sustainability reporting and boards with female directors are negatively associated withsustainability reporting. This study also found that sustainability reporting is likely to be influencedby firm size and firm growth. Additionally, the study also reveals that younger firms are likelyto adopt sustainability reporting.Originality/value – This is the first study to examine the influence of board characteristicson sustainability reporting in Sri Lanka, considered as a developing economy with an emergingequity market.