This paper focuses on the predictive effect of corporate governance (CG) on banks’ CSR disclosures. In this predictive model, we use archival data of the Bangladeshi banking sector. In this analysis, we used 11 years of CSR, corporate governance and other financial data for 30 banks from Bangladesh. We used a checklist of 60 distinct CSR items to evaluate the CSR performance. We have used random-effect and fixed-effect regression models to examine the impact of different CG elements on CSR disclosures. The study demonstrates that managerial ownership, independent directors, and control variables such as bank size, leverage, age, and bank type significantly affect CSR disclosure. Conversely, board size, female directors, and control variable ROA have been found insignificant. Aligned with legitimacy and political cost theories, owner-managed banking businesses perform more CSR activities. Independent directors in Bangladeshi banks ensure good governance and a lower level of interference with the management. Large banks in Bangladesh are more capable of participating in diversified CSR activities. As a result, they report more CSR activities than smaller banks. Higher leveraged and conventional banks report more CSR to give confidence to their shareholders. Whereas newer banks disclose more CSR to attract new clients. The outcome of the paper adds to the CSR literature by investigating empirical information based on archival data on the influence of CG elements on the CSR activities of a transitional economy’s banking sector.
Keywords: Agency Theory, Bangladesh, CSR Disclosure, Corporate Governance, Legitimacy theory
