Board Flexibility in Diversity, Experienced CEOs and Corporate Sustainability Disclosure: Evidence from the Emerging Market

We examine the relationship between board flexibility in diversity, experienced CEOs and corporate sustainability disclosure (CSD) in the developing economy context. We utilised the annual reports of all the listed commercial banks in Bangladesh between 2016 and 2020. Our study found a positive and significant association between board flexibility in diversity, which includes independent directors, foreign directors, directors with a business background, accounting professional directors, experienced CEOs and CSD. Importantly, the strategic leadership role of experienced CEOs constructs a good boardroom environment for the diversified board to place more emphasis on stakeholders’ interests and business legitimacy in a developing economy. However, we found a negative relationship between directors with a law background and CSD in the developing economy context, perhaps their role might be positive where a regulative environment exists for corporate sustainability disclosure. Our study was controlled by the audit committee and sustainability committee, and we found that the sustainability committee had a positive and significant association with CSD. Our findings have implications for developing economies specifically and around the globe in general.

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