Do attainment discrepancy and slacks moderate the relationship between board characteristics and level of sustainability disclosure?

Abstract

Disclosure of sustainability practices has become vital for organizations to secure their image as legitimate corporate citizens in society (Panjaitan, 2017). It might be influenced by the board of directors subject to the performance and resource availability. The prime objective of the paper is to investigate the association between board characteristics and a level of sustainability disclosure with the moderating role of performance gap and resources. Secondary data was obtained from 174 non-finance firms representing 16 sectors of the Colombo Stock Exchange (CSE) over 2016–2020. The study used 13 board characteristics and 7 controlling variables. According to the results of ordered logistic regression, board size and audit committee size have a significant impact on the degree of sustainability disclosures. At the same time, female directors displayed a significant adverse effect on such disclosures. It was found that resource availability significantly impacts the relationship between board characteristics and sustainability reporting. The study contributes to the extant literature by filling an empirical gap in the area by encapsulating a more comprehensive sample, using a broader theoretical perspective and a wide measurement to capture sustainability disclosure. The study findings are predicted to have extensive managerial ramifications in strengthening corporate governance mechanisms to elevate sustainability disclosure