The Effect of Board composition and Characteristics of Governance on Sustainability Reporting in the Korean Context

초록

While the awareness of sustainability has raised among stakeholders significantly and ESG has recently emerged as an alternative for sustainability, the requirement for firms to disclose information regarding their impact on the environment, society and governance has become the main agenda. Initiatives related to ESG, such as TCFD (Taskforce on Climate-related Financial Disclosure), have gradually announced the frameworks for such disclosure, and reporting related information is expected to be mandatory in near future. Yet, the publication of related reports for firms in Korea is not fully mandatory currently and the obligation will gradually be introduced in the future. Thus, as the majority of reports are published voluntarily, exploring the antecedent factors on Korean firms’ ESG disclosure will be a meaningful trial. Since disclosure forms a strategic part of the stakeholder engagement process and it is naturally related to boards of directors, the characteristics of the board could be antecedent factors for voluntary ESG-related reporting. This study aims to explore antecedent factors focusing on board characteristics for Korean firms’ sustainability reporting. In this context, this study reviewed on related literature to explore such factors and build hypotheses reflecting the Korean context. We author expect this study could have uniqueness as few prior studies examined factors influencing the disclosure of Korean firms and reflecting Korean context to the board characteristics. This study would contribute to examining factors influencing ESG reporting of Korean Firms and derive related implications for firms and policymakers.