This paper examines the state of CSR disclosure of the Mauritian listed companies in 2012 era where, CSR engagement and reporting is no more an elusive concept but a reality over the island with the growing number of guidelines and incentives on the subject over the years. It also investigates whether 8 years after the introduction of the CCGM, the code still hold good and CG attributes influence CSR disclosure of the listed companies.
The mean for CSR score of 14 coupled by the fact that all the sample firms did make CSR disclosure irrespective of their level of disclosure gives an indication that Mauritian listed companies are active in CSR activities and that they have understood the importance of community involvement which is the way forward to success. At the same time however, it underlines that CSR reporting through annual report is quite low and commands more CSR guidelines for listed companies on what they need to disclose (OPSG, 2011, pp.25). To date, there are a lot of guidelines on CSR engagement but very few or even no guideline on CSR reporting thus explaining the differences in the level and nature of CSR disclosure of the sample firms. Each one discloses what he thinks right and important. With no guidance on CSR reporting the mean is 14 which is rather good and there is no doubt that with detailed guidelines this will increase over the years. Also, given that stakeholders put great emphasis on social activities; it is high time for Mauritius to adopt a specific framework for CSR reporting such as the GRI or the Aa1000 Accountability Principles Standard. This would set up some consistency in CSR reporting which would in turn facilitate comparison among firms. It is important that top management integrate CSR to the organisational strategy.
To add to it, auditors provide assurance on the corporate governance report but, though CSR reporting quite often fall under this report; there is no audit on CSR reporting. This dictates that, apart from the few guidelines on CSR reporting in the CCGM under section 7 ‘Integrated Sustainability reporting’, the NCCG should adopt a specific framework for CSR reporting and auditing of CSR disclosure in line with developed countries. Though this seems a little far fetch and might take years to realise but, being a developing country with international representation it is imperative for tomorrow. Another field with necessitates further guidelines and regulatory incentives is the energy theme.
Additionally the findings indicate that the CCGM still hold good as the Mauritius listed companies strictly stick to its’ core requirements such as the title and functions of the CEO and chairperson be kept separate, the presence of at least 2 independent director on board and last but not least, the need for each board to have an audit committee. One of the core elements determining the success of an audit committee is the number of independent director sitting in the committee ( Said et al.,2009, pp.223) thus, pinpointing the loophole of the CCGM. It is surprising to note that for such a crux committee, the code simply recommends that the majority be independent. It does not impose a least minimum of independent director presence in the audit committee. This is alarming because being a recommendation only, not all companies adhere to this such that 2 companies out of the sample audit committees’ were composed entirely of executive directors. Even though if the code does not imposes the majority independent director audit committee composition requirement, it should impose a minimum level of independence in the audit committee thus seizing public confidence and at the same time reducing agency cost. Such a crucial function of an organization should not by left at the discretion of management as it is as if we are giving the thief the key to steal.
Based on the statistical result, this study finds that factors such as board size, board composition, managerial ownership and firm size are positively related to the extent of CSR disclosure of the Mauritian listed companies through their annual reports. However, audit committee composition and ownership structure did not prove to have an association with CSR disclosure. The most significant factors influencing CSR disclosure are firm size measured both in terms of revenue and total assets followed by board size. This means that large listed firms with large board size disclose significantly more CSR information than others. The reason behind this is that large firms are involved in more activities and are better viewed by the public thus, commanding more information on CSR. At the same time, board with more members benefit from more experience which is likely to improve the effectiveness of the board and result in more dynamic CSR engagement and reporting.
The findings indicate that some if not all the CG attributes influence the level of CSR disclosures of the Mauritian listed companies. Thus, in an attempt to increase the level of CSR reporting of the Mauritius listed companies, apart from guidelines on CSR reporting; modifying the above mentioned CG attributes which have documented an association with CSR reporting of the listed companies through a revised code of corporate governance for Mauritius might be useful. While some will cause changes of great magnitude, other will cause much smaller changes such that, the overall level of CSR disclosure of the Mauritian listed companies will grow.
Future Research:
Including non-Mauritian listed companies in the sample in order to help government to come up with more holistic regulations.
This study concentrates only on some of the factors influencing CSR reporting in Mauritius, using interviews as a medium to collect data might be more fruitful in indentifying other factors influencing CSR involvement and reporting over the island.
Also, annual report is only one of the various ways of disclosing information thus, using CSR information from various sources will be more appropriate in order to have an entire view of the CSR reporting of an organization.
