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- Title
Corporate social responsibility and the readability of listed firms' compensation discussion and analysis.
- Authors
Ben-Amar, Walid; Mandzila, Eustache Ebondo Wa; McIlkenny, Philip
- Abstract
This paper investigates the relationship between firms' corporate social responsibility (CSR) performance and the complexity of their executive compensation disclosures. Based on stakeholder theory predictions, we expect that CSR-conscious firms, with their commitment to high ethical standards, will provide more transparent and easy-to-read executive compensation disclosures. Using a sample of 196 firms listed on the Toronto Stock Exchange, our results show a positive association between the implementation of CSR practices and the readability of textual disclosures in the Compensation Discussion & Analysis (CDA) report. Among the three components of the total CSR score, the governance score is negatively related to the CDA's linguistic complexity, which suggests that better governed firms disclose more readable CDA reports. Our findings contribute to the growing literature on disclosure strategies in CSRoriented firms by exploring the association between a firm's CSR consciousness and the textual complexity of executive compensation disclosures.
- Subjects
SOCIAL responsibility of business; EXECUTIVE compensation; STAKEHOLDER theory; PREDICTION theory; STOCK exchanges
- Publication
Recherches en Sciences de Gestion, 2020, Issue 138, p215
- ISSN
2259-6372
- Publication type
Article