MEDIATING ROLE OF CORPORATE GOVERNANCE ON THE

RELATIONSHIP BETWEEN ENVIRONMENTAL PERFORMANCE

AND ENVIRONMENTAL DISCLOSURE

Beenish…….
P …..

MAIN SUPERVISOR

……….

CO-SUPERVISOR 1
……….
CO-SUPERVISOR 2
……….

Ph.D. Research Proposal

Faculty of Business, Economics and Social Development (FBESD)
Universiti Malaysia Terengganu
Contents
CHAPTER 1.........................................................................................................................................1
INTRODUCTION................................................................................................................................1
1.1 Research Background................................................................................................................1
1.2 Problem Statement......................................................................................................................5
1.3 Significance of the Study...........................................................................................................6
1.4 Objectives of the Research........................................................................................................7
1.5 Research Hypothesis..................................................................................................................8
1.6 Chapter Conclusion...................................................................................................................9
CHAPTER 2.......................................................................................................................................10
LITERATURE REVIEW...................................................................................................................10
2.2. Environmental performance and Environmental Disclosure................................................12
2.3 Corporate Governance and Environmental Performance......................................................15
2.3.1 Corporate Governance and Environmental Disclosure.......................................................16
2.3.2 Corporate Governance, Environmental Performance and Environmental Disclosure.....17
2.4 Supporting Theories................................................................................................................18
2.4.1 Legitimacy Theory...........................................................................................................18
2.4.2 Voluntary Disclosure theory:................................................................................................20
2.4.3 Voluntary Disclosure...........................................................................................................21
2.4.4 Categories of Voluntary Disclosure................................................................................22
CHAPTER 3.......................................................................................................................................35
Theoretical Framework......................................................................................................................35
Conceptual framework........................................................................................................................35
CHAPTER 4.......................................................................................................................................36
RESEARCH METHODOLOGY.......................................................................................................36
4.1 Introduction.............................................................................................................................36
4.1 Measurement of Variables......................................................................................................36
4.1.1 Dependent Variable (Environmental Disclosure)....................................................36
4.2.2 Independent Variable (Environmental Performance)............................................38
4.2.3 Mediating Variable (Corporate Governance)............................................................39
4.2.3 Control Variables...........................................................................................................40
 4.3 Research Design.......................................................................................................................41
4.3.3 Population.........................................................................................................................41
4.3.4 Sample..............................................................................................................................41
4.3.5 Model Specification..........................................................................................................41
4.4 Chapter Conclusion.................................................................................................................42
References...........................................................................................................................................43
 CHAPTER 1
INTRODUCTION

1.1 Research Background

Issues concerning environments are growing at a fast pace. Initially, they are concerned
primarily with the depletion of natural resources, wilderness perpetuation, population
outgrowth, and pollution. However, with the advent of time, they become prominent through
inclusion relative to climate diversifications, species extirpation, biodiversity, energy supply,
and various earth systems' agitation (Dryzek, 2013). Substantial national and multinational
organizations are marked as a crucial environmental issue due to their carbon emanations and
waste management praxis and higher energy utilization. Government, as well as non-
government organizations, are emphasizing more significant pressure on the business
organizations for environmental sustainability (Bebbington et al., 2014). The requirement for
environmental responsibility and increased focus of stakeholders constitutes it significantly
essential for organizations to fortify their disclosure practices along with the methods of
managing the environment (Hopwood, 2009).

All over the world, they are compared to ever before organizations are enforced for
information disclosure regarding environmental enactments resulting from high community
scrutiny. This issue has been heightened by researchers and scholars resulting from the
extensive knowledge and comprehension of environmental studies (Rafique et al., 2017).
Around the world, several countries put in place the particular and distinct legal obligations for
companies to disclose voluntary information or details in the annual reports, despite
environmental disclosure is nevertheless voluntary. Notwithstanding, it has been considered by
the researchers, scholars, and investigators that it becomes essential for the organizations to
contemplate their effects upon the natural environment (Deegan, 2002), and to entail the
outcomes of their performance to all the interested parties involved: comprised of (Peiyuan,
2005); employees, investors, the general public, media, consumers and most importantly the
shareholders. For disclosing environmental performance, various countries are employing
distinct means, as it becomes essential for organizations to communicate environmental
concerns to all the interested parties (Rafique et al., 2017). Accordingly, communication modes
like magazines, newsletters, press releases, annual reports, along with sustainability reports,
should be considered for this purpose. Neu et al. (1998) indicated that the prime source for
environmental reporting is the annual reports of the organizations. Aligned to this, it was
argued that these reports entail knowledge relevant to the environmental implication of their
operations (Deegan, 2002).

Over time, the quantity of organizations has been increased, that have undertaken to quantify
organizations’ environmental effects for various purposes: comprised of (Carroll & Shabana,
2010); declining risk and decreasing cost, the legitimization of organizational routine business
operations, enhancement of corporate reputation, responsiveness to the stakeholders, and
strengthening the stakeholders' trust. For controlling organizations' environmental interplay and
embedded environmental supervision, organizations have employed various approaches in the
context of organizational thinking, processes, and practices (Rafique et al., 2017). Such plans
comprised of capital investment appraisals, environment management systems along with
environmental accounting and reporting. Gray et al. (2014) argued that environmental
performance and environmental disclosure of business organizations would be increased
through the employment of these approaches.

For opening doors to external equity and for the refinement of firms' value, good corporate
governance (CG) discharge the significant role. Several objectives are fulfilled by the excellent
CG practices in developing countries like Pakistan which includes, facilitating capital markets
development in an economy, abatement of political turmoil, payment of interest upon
borrowed capital, and reduction of transaction cost. Resulting from good CG practices their
exists secured and influential association of companies' board of directors (BODs) and its
management to their employees, stakeholders (inclusive of all major and minor shareholders
and stockholders), suppliers, customers and with regulatory bodies; where, their prime
objective is to maximize the shareholders' wealth. Doing business in an ethical way requires
the environmental reporting and corporate social responsibility (CSR) by focusing majorly
upon the stakeholders inclusive of customers along with the financial performance that are the
principal elements upon which CG rests.
Through voluntary initiatives, the program for sustainable development has been undertaken so
far. For this purpose, various international voluntary bodies are operating like "World Business
Council for Sustainable Development." Nevertheless, multiple countries have considered their
own voluntary bodies. From the previous two decades, the social and economic development
of Pakistan has been distressed, resulting from the environmental issues (Rafique et al., 2017).
In Pakistan environmental reporting is encouraged through various regulations like "Corporate
Social Responsibility General Order 2009, National Environmental Quality Standards and
Corporate Social Responsibility Voluntary Guidelines 2012;" organizations like "Corporate
Social Responsibility Center of Pakistan, National Forum for the Environment and Health,
Pakistan Center for Philanthropy and Responsible Business Initiative" along with awarding
system like "Best Sustainability Reporting Award, Environmental Excellence Awards, and
Pakistan Environmental Reporting Awards." Presently various organizations have started to
disclose their environmental information. However, the correspondence and fairness among
published information by companies and their actual environmental performance is yet an issue
that requires further consideration.

The Pakistanis' corporations are highlighting the alleged and presumed green issue; however,
as per the concerned literature, there is no evidence. Thus, Patten (2002) argued that it is not
astonishing that prior researchers pointed out the broader abundance upon corporate
environmental reporting performance. Accordingly to Patten (1991) and (1992) some
organization contemplates negative association among the environmental performance and
information. Notwithstanding, Deegan & Rankin (1996) indicated that various organizations
voluntarily provide such ecological details to support the organizational worthiness towards the
stakeholders. Aligned to this, Wise & Ali (2008) argued that meanwhile, some organizations
perceive in the lacking of association among environmental enactment and voluntary
disclosure; hence, they did not provide their environmental information. Resulting from the
deficiency of a rigorous regulatory system, stakeholders are obstructed to decide regarding
companies due to wide discrepancies among the practices of environmental disclosure.

Mostly the external organizational factors have been considered for studying the environmental
reporting (Deegan and Rankin, 1996) and did not incorporate information concerning the
interceding or mediating variables. Whether to disclose environmental information or not, it is
the circumspection of top-level management. However, Tilt (1994) argued that there exist
inadequate characteristics that increase the top-level managements’ motivational level for
disclosing the environmental information.

In the accounting literature the most extensively highlighted issue is the comprehending of
affiliation among environmental performance and environmental disclosure both theoretically
as well as empirically (Ingram and Frazier., 1980; Hughes et al., 2001; Clarkson et al., 2008;
Mahmood et al., 2017) Theoretically as well as empirically the current and actual research
concerning this issue is ambiguous, indecisive and controversial (Freedman & Wasley, 1990;
Wang et al., 2004; Al-Tuwaijri et al., 2004; Clarkson et al., 2011; Li et al., 2017). Therefore,
the current research concentrates on examining the association between environmental
performance and environmental disclosure. Further, prior analyses have considered the annual
reports for reporting the environmental information that significantly impacted the companies'
stakeholders (Patten, 2002; Wise & Ali, 2008). Hence, the current work substantially
contributes to the general knowledge by providing recognition and consciousness concerning
the environmental performance and environmental disclosure in an emerging market of
Pakistan. Furthermore, in literature, there exists a gap concerning affiliation among the
environmental reporting and corporate governance, especially in the context of Pakistan. Thus
the present work aims to overcome this gap by contributing primarily scrutiny into the
affiliation between the elements of environmental reporting and corporate governance in the
context of Pakistan.

From the literature, it is evident that mostly the researchers focused either upon the affiliation
between environmental disclosure and environmental performance (Freedman & Wasley,
1990; Wang et al., 2004; Al-Tuwaijri et al., 2004; Clarkson et al., 2011; Li et al., 2017), or
upon the affiliation between environmental disclosure and corporate governance (Patten, 2002;
Wilmshurst et al., 2000; Adams, 2004 Wise & Ali, 2008). To the best of my knowledge and
based on examined literature, this study is the first to investigate the relationship between
environmental disclosure, environmental performance, and corporate governance as a
mediating variable. For completing the regression test, firm performance will be employed as a
control variable.
1.2 Problem Statement

Environmental problems are rapidly evolving—the first concerns concerning pollution,

conservation of the wilderness, population growth, and natural resource depletion. Over time,
such issues have been related to matters concerning energy supply, biodiversity, extinction of
species, climate change, and other earth system disturbances (Dryzek, 2013). Business
organizations (unusually large multinational and national companies), because of their high
energy use and waste management practices and carbon emissions, are considered to be the
primary source of environmental problems. In the course of the period, the number of
organizations, including confidence in stakeholders, has increased, legitimized their continuing
operations, responses to stakeholders, lower risks, and lower costs have begun to quantify their
environmental impacts (Carroll & Shabana, 2010) for a wide range of reasons. Organizations
have used different approaches to monitor their environmental activities and to integrate
environmental sustainability into organizational processes, strategies, and thought.
Environmental accounting and monitoring, environmental management programs, and
investment evaluation are included. Such procedures allow organizations to enhance
environmental efficiency and knowledge (Gray et al . 2014). To date, international efforts have
followed the sustainable development agenda. Besides, each country has its voluntary agencies
(including foreign agencies such as the World Business Council for Sustainable Development).
Environmental problems have influenced economic and social growth in Pakistan over the past
couple of decades (Malik, 2014). Several organizations (e.g., Pakistan's Philanthropic Centre,
Pakistan's National Center for Climate, Health, Corporate Social Responsibility) (e.g., National
Environmental Quality Standards, Business General Social Responsibility Order 2009, and
Corporate Corporate Social Responsibility Order 2009) control. Environmental reporting is
promoted in Pakistan (e.g., National Environmental Quality Standards, General Corporate
Social Responsibility Order 2009 and Voluntary Corporate Social Responsibility Guidelines
2012) and award schemes (e.g., Pakistan Environmental Reporting Awards, Environmental
Excellence Awards, Best Sustainability Reporting Awards). Some businesses are now
beginning to report their environmental data, but a problem that needs to continue investigating
remains the consistency among actual environmental performance and information published
by firms.
1.2 Significance of the Study

This research provides an analytical and theoretical contribution to the literature. The critical
empirical contribution of the study is proof of a significant relationship between environmental
disclosure and results. Furthermore, this study offers an overview of the link. There is a
distinction between good and poor performers in the pattern of disclosure and the reasons for
that variance. The fundamental theoretical contribution of this paper is harmonizing the
voluntary communication theory and the theory of legitimacy to explain the connection
between environmental and environmental knowledge. This is what we are talking about.
Empirically the current and actual research concerning environmental performance and
environmental disclosure issues is ambiguous, indecisive, and controversial (Al-Tuwaijri et al.,
2004; Clarkson et al., 2011; Li et al., 2017).

Further, the comprehensive studies are mostly from the context of U.S. Europe, Australia, and
China. Where studies on developing countries are limited, and this is mainly the case in
Pakistan. As compared to the developed countries, data regarding environmental performance
is not disclosed correctly, or insufficient data is provided by the firms in developing countries.
Therefore, within the context of developing countries, this study will contribute to the literature
by providing empirical evidence of significant affiliation among environmental performance
and environmental disclosure by employing data of Pakistani listed firms. Additionally, this
study will give the variation in disclosure practices among different environmental performers
by splitting the firms into good, bad, and mixed environmental performers to examine the
impact of environmental performance on environmental disclosure.

From the ownership structure point of view, this study is the first one to incorporate the various
ownership structures like institutional ownership, state ownership, managerial ownership,
foreign ownership, and block-holder ownership, where the prior studies concerning this issue
have considered only the institutional ownership particularly in the context of Pakistan.
Further, previous studies, while considering these variables gather the data of top listed firms
on stock exchanges irrespective of the sectors. Therefore, this study will employ an equal
proportion of firms from all the listed non-financial areas of PSX.

Regardless of the increased quantity of environmental conditions, comparatively fewer studies

determine how environmental performance is influenced by corporate governance practices
(Bai et al., 2010; Paloviita et al., 2010). Therefore, this study will significantly contribute to the
literature in providing empirical evidence of affiliation among environmental performance and
corporate governance within the context of Pakistan. Further, from the research, it is evident
that CSR is well examined in Pakistan, and sound CSR practices enhance corporate image and
the firms' financial performance (Majeed et al., 2015; Lone et al., 2016). Further, strong
affiliation among CG and corporate disclosure has been examined; however, empirically, there
exists a gap in whether the environmental disclosure is also impacted by CG or not. Therefore,
this study aims to fulfill the gag by examining the impact of CG on environmental disclosure
by employing data from Pakistani-listed firms.

Moreover, efficient CG mechanisms will demonstrate improved environmental performance

that will influence the management to disclose high-quality environmental information.
Nevertheless, despite of developed and refined corporate business environment, the
effectiveness of good CG towards environmental performance and its disclosure is yet
unanswerable. Furthermore, there is no previous research that examined the role of corporate
governance as a mediating variable in the affiliation of environmental performance and
environmental disclosure. Accordingly, this work will significantly investigate the mediating
role of CG in the association between environmental performance and environmental
disclosures in Pakistan. Regarding this issue in prior studies, firm performance has employed
as a dependent variable was completing the regression firm performance in this study will be
applied as a control variable.

1.3 Objectives of the Research

This study aims to examine the underlying association among environmental performance,
environmental disclosure, and corporate governance as a mediating variable where the firm
performance will be employed as a control variable. Accordingly, the objectives of this study
are as follow:

1. To examine the affiliation among environmental performance and environmental

disclosure of Pakistani listed firms
2. To explore the association between corporate governance and environmental
performance of Pakistani listed firms
3. To explore the affiliation among corporate governance and environmental disclosure of
Pakistani listed firms
4. To examine the mediating role of corporate governance in the association between
environmental performance and environmental disclosure

1.4 Research Hypothesis

The following hypotheses have been postulated for the current research:
H1: Environmental performance is related positively to environmental disclosure.
H2: Corporate Governance is related positively to environmental performance.

H3: Environmental disclosure trends differ between good environmental performers and bad

environmental performers.

H4: Strong and weak performers both share more detail about the setting than mixed performers.

H5: Corporate governance has a mediating role in the relationship.

1.5 Definition of Terms

The following section elaborates on the various terms used in this study.

1.5.1 Environmental Performance

The term environmental performance is defined as: "the results of an organization's

management of its environmental aspects" (ISO, 1999). Form this definition, and it is
examined that environmental performance mainly focuses on the results of managerial conduct
concerning the "natural environment" along with the (administrative) activities themselves.

1.5.2 Environmental Disclosure

Environmental disclosure is defined majority as disclosure by firms concerning the firms'

environmental implications. Through environment disclosure, firms are provided with the
possibility to influence stakeholders that the firms' operational activities and efforts are
environmentally friendly. It enhances the firms' accountability beyond the traditional role of
providing financial disclosure, assuming the significant environmental liabilities of firms.

1.5.3 Corporate Governance

Corporate governance is a phenomenon that affects not only the financial performance but also
the social performance, and quality of financial reporting of the firm. It is "the system by which
companies are directed and controlled" (Cadbury Committee, 1992). There is a set of corporate
governance practices, including board size, Independence of the board, board expertise, board
gender diversity, ownership structure, etc. which affects different dimensions of environmental
performance differently.

1.6 Chapter Conclusion

This chapter presents an overview of the research study outlining the

background of the research, the problem statement, and the research
objectives, along with the research hypotheses that will be answered by
this study. Besides, the chapter discusses the significance of the current
research, i.e., examining the mediating role of CG in the affiliation among environmental
performance and environmental disclosures in Pakistan for completing the regression firm
performance in this study employed as a control variable. Further, this chapter defined
the key terms i.e., environmental performance, environmental disclosure,
and corporate governance.
 CHAPTER 2
LITERATURE REVIEW
2.1 Introduction:

This chapter focused on previous studies which described the association between

organizational environmental performances and environmental disclosure and the mediating role

of corporate governance in this relationship, and also related theories of prescribed association

and changes due to the mediating position.

2.2 Previous literature:

The current documentation can be classified into three broad categories of environmental

accounting study. The first research group explores the importance of the value of corporate

environmental information. It has concluded that this knowledge is useful to investors trying to determine

environmental liabilities in various circumstances. The second line of literature explores factors that

affect management decisions on potential environmental liabilities. A third line of research, one addressed

in the following paragraphs as it is essential for this report, investigates the relationship between

environmental disclosure and environmental results. The third section of the story explores the

relationship between environmental disclosures and environmental outcomes.

The relation between the environmental material in corporate disclosure and environmental

performance is explored by Ingram and Frazier (1980). The research dealt with the lack of social

responsibility knowledge based on its voluntary existence in annual reports. In 20 categories of pre-

selected contents in four dimensions, the authors have given environmental disclosures; proof, time,

specialty, and subject.

Wiseman (1982) analyses in their annual reports, using research methodology almost similar to

Ingram and Frazier (1980), the level of voluntary environmental reporting by corporations. The research
is based on the CEP tracking of the 26 biggest US companies from 1972-1976. An environmental

divulgation index has been developed by Wiseman, which contains 18 items, in the following four

categories: economic factors (5 items), climate conflicts (2 items), emissions control (5 items), and

environmental disclosure not protected by the remaining three (6 items). Therefore, each object has a

score based on its quantitative or qualitative disclosure (3 f).

The relationship between corporate emissions and emission declarations made in annual reports

Freedman and Wasley (1990) and the SEC are investigated, and 10 K reports published. Their selection

involves 50 US companies in four industries. The correlations between the annual report disclosure

indices and the CEP indices are tested in a Spearman ranking correlation analysis and among 10 K and

the CEP indices. Results revealed that the real environmental output of businesses is not demonstrated by

either annual environmental reports or 10 K of environmental reporting. (Steel, Coal, Pulp and Paper,

Electric Utilities).

From a voluntary theory of transparency, Bewley and Li (2000) look at factors linked to Canada's

environmental openness. In their 1993 annual reports, 188 Canadian manufacturing companies use the

Wiseman index to assess environmental transparency. A corporation's tendency towards pollution (i.e.,

environmental performance) is determined by its membership in the industry and whether or not they

register in the National Pollution Release Inventory to the Department of the Environment. The study

suggests that businesses that cover more mass media outlets have an enormous appetite for waste, and

more political attention is more likely to decrease their environmental impacts.

For both 1992 and 1993, Hughes et al. (2001) study environmental reports from 51 US

businesses. Again, the authors use the Wiseman index to calculate the environmental information

provided in the MD&A Letter and notice section of the President and then determine whether the

environmental reports comply with the CEP (good, mixed, and inferior) scores.
 In previous research, Patten (2002) identified three issues; (1) lack of influence on other factors,

(2) small collection of samples, and (3) insufficient environmental performance measurement.

As only a small number of companies in just four industries have been following the CEP, it can

be troublesome to rely on CEP for the selection of samples. Moreover, in order to determine the

environmental efficiency of businesses in various sectors, CEP did not follow the same standards and

precise methodology. Patten uses sales structured TRI data for environmental performance in order to

resolve this issue. They are using a list of 131 American companies and a changed Wiseman from 24

different industries. Patten found that the TRI/sales are positively related to both measures of

environmental disclosures, indicating a negative relationship between environmental efficiency and

environmental disclosures, by calculating and counting environmental disclosures in the 1990 yearly

reports.

More recently (2004), Al-Tuwaijri et al. are exploring the relationships between environmental

disclosure, environmental performance, and economic performance through a similar equation approach.

In particular, they measure environmental performance as the percentage of total recycled waste

produced. Environmental divulgation steps are carried out by four types of content review (potential

classification of responsible actors, hazardous waste, oil and gas spills, environmental fines, and

penalties). By comparison to the discretionary disclosures that we discuss, these reports are often non-

discretionary. They find that environmental success is a decisive factor.

2.2.1 Environmental performance and Environmental Disclosure

Theoretically, as well as empirically the current and actual research concerning this issue is
ambiguous, indecisive and controversial (Freedman & Wasley, 1990; Wang et al., 2004; Al-
Tuwaijri et al., 2004; Clarkson et al., 2011; Li et al., 2017). Prior studies failed to found any
relationship between them (Ingram et al., 1980; Wiseman, 1982; Freedman et al., 1990; Liu et
al., 2011). On the other hand, Bewley et al. (2000), Hughes et al. (2001), Patten (2002), De
Villiars, et al. (2011) have found a negative relationship between the two hotspots. In contrast,
Al-Tuwaijri et al. (2004), Clarkson et al. (2011), Lu et al. (2017) found a positive relationship.
This section theoretically as well as empirically investigates the relationship between the two
hotspots by primarily focusing upon the research papers' context, proxies for environmental
performance, ways to quantify the environmental disclosure and theories employed.

For investors and stakeholders, companies disclose higher information regarding their
environmental practices that have a poor reputation (De Villiers et al., 2011). Further, it
indicated that companies for maintaining their image discloses higher information so that the
attention of investors and stakeholders should be diverted from the environmental hurdles
fostered by the companies environmental exercises. In the context of China, listed steel
companies were examined by Liu et al. (2011). They employed content analysis method and
index-based measure for environmental disclosure and environmental performance
respectively and indicated that firms disclose environmental information that is not consistent
with their actual and genuine environmental performance.

In the context of U.S. Ingram and Frazier (1980) measured the environmental disclosure of
forty U.S. companies by incorporating environmental performance proxy (environmental
performance rating). The results of the content analysis technique revealed no significant
relationship between them. Another study conducted in the U.S. by Patten (2002) has
examined 151 companies. For quantifying environmental performance, they considered annual
reports for toxic release data and disclosure content and found a negative relationship between
the variables. The study also indicated that companies with higher environmental performance
provide little environmental information compared to the companies with poor environmental
performance. Aligned to this, Sutantoputra et al. (2012) conducted research by considering the
companies listed in Australia. They have studied the annual reports of 200 listed companies
and found that worst-performing companies (that profoundly impact the environment) are
highly involved in providing or disclosing their environmental practices.
On the other hand, for measuring environmental disclosure Al-Tuwaijri et al. (2004) employed
potential parties accountable, environmental fines and penalties, toxic release, and Toxic
Release Inventory as proxies for environmental performance. They employed the content
analysis technique and revealed that the two variables are associated positively. Further, for
measuring the environmental disclosure, Global Reporting Initiative was employed by
Clarkson et al. (2008), where environmental performance TRI was used. Findings have a
positive relationship between them. Aligned to these similar measures were employed to
investigate the 51 companies operating in Australia by Clarkson et al. (2011) and found a
positive relationship between considered variables. In the context of China, for investigating
the affiliation between environmental performance and environmental disclosure (Meng et al.,
2014) employed content analysis method and index-based measure for environmental
disclosure and environmental performance respectively, upon the gathered data of 533 listed
companies. In their study, companies' performance was further divided into Good, Poor, and
Mixed performers. Non-linear relationship was found for the variables. They indicated that
firms whose performance is superior and firms whose performance is worst both disclosed
higher information concerning the firms' environmental exercises compared to firms that have
average returns. Resulting from the theoretical findings between the two variables, it is
hypothesized that:

H1: Environmental performance is related positively to environmental disclosure.

Regarding the predictions of the socio-political theories, Gray, Kouhy, and Lavers (1995)

and Lindblom (1994) argue that the corporations that are challenged for their social credibility

have an opportunity to enhance environmental disclosure: (1) inform and inform (re) educate

relevant publics about (actual) performance modifications; Socio-political models assume that

the environmental output and the degree of transparency would be negative. Thus, the two

conflicting theories include opposite forecasts of how environmental performance will affect

discretionary strategies for environmental knowledge. Now we have our opinions (alternatively):
H2: Environmental performance is related negatively to environmental disclosure.

2.3 Corporate Governance and Environmental Performance

Due to the altering nature of businesses' environment and requirements of stakeholders, firms
are accountable for determining the overall balanced strategy to undertake the stakeholders'
needs while maintaining their positions in the market. Firms' strategies, decisions, and
priorities are now shifted towards improved environmental performance and its disclosure due
to the increased public concerns on environmental quality. It has been suggested by the prior
studies (Baden, et al., 2009; Paloviita et al., 2010) that in that the stakeholders discharge
influential role in the sustainability efforts of firms and (Boesso & Kumar, 2007; Orij, 2010)
and crucial to the corporate performance to survival. Adopting social and environmental
practices is influenced through the stakeholders' involvement (Bai et al., 2010; Paloviita et al.,
2010) as well as control the appropriate allocation of resources towards efforts that sure
stakeholders. Therefore, effective CG practices might cover various stakeholders' needs.
Accordingly, concerns of stakeholders regarding environmental quality, has encouraged the
firm to act and consider high friendly environmental operations and activities.

Generally, it is suggested that the adverse effect of activities concerning the environment is
reduced with good CG and consequently lowers the misconduct of laws and regulations
concerning the environment. Effective BODs influence the critical environmental strategies
and compliance decision and therefore enhances the environmental performance. Weir et al.
(2001) and Kassinis et al. (2002) indicated that BODs being part of CG overcome the
environmental issues by developing corporate strategies and making decisions appropriately.
Furthermore, Kassinis & Vafeas (2002) reported that BODs have the ability to ensure excellent
environmental performance by asking experts and seeking legal advice as additional measures.
Hence, it can be concluded that firms resulting from the inefficient CG probably targeted in a
lawsuit for their environmental performance. Regardless of the increased quantity of
environmental conditions, there are comparatively fewer studies that determine how
environmental performance is influenced by corporate governance practices. Therefore, study
hypothesized that
H2: Corporate Governance is related positively to environmental performance.

2.3.1 Corporate Governance and Environmental Disclosure

In emerging markets inclusive of Pakistan, accounting legislations are still in the developing
phase. In accordance with the Pakistan Environment Protection Act 1997, "since the
organizations are involved in the destruction of the environment by polluting it so, they are
also required to provide information about the fortification, safety, maintenance, improvement
of the environment and finally, endorsement of the sustainable development." Upon the
organizations' financial performance, CG has constructive upshot. Hamilton (2004) indicated
that they are accountable to ensure equality, justice, transparency along with the sensible and
moderate financial as well as non-financial reporting, which incorporates the voluntary
disclosure; that significantly upholds the interest of all stakeholders. Accordingly, Beekes et al.
(2016) firms having sound CG mechanisms discloses financial as well as non-financial
information to significantly influence the stakeholders and to protect them in the market. In
contrast, firms without having sound CG mechanisms exploit and eliminate essential
information from the market (Mathews, 2008) that consequently leads to information
asymmetry resulting from the voluntary nature of disclosed information.

Prior researchers have examined the affiliation among features of CG and corporate
philanthropy, particularly the environmental disclosure. Findings of previous researches
indicated a positive association among environmental reporting and CG (Gibson &
O'Donovan, 2007), while others (Chen et al., 2000; Gul et al., 2004; Laidroo, 2009) examined
the affiliation of CG and environmental revelation. For stakeholders, CG practices result in
more significant voluntary and non-voluntary disclosure of information. Various researches
have examined the strong association of CG and degree of VED (Ho and Wong, 2001; Haniffa
et al., 2002; Huafang et al., 2007; Barros et al., 2013; Alhazaimeh et al., 2014; Samaha et al.,
2015). Similarly, other researches (Haniffa et al., 2005; Michelon et al., 2012; Sharif et al.,
2014; Majeed et al., 2015; Lone et al., 2016) indicated a significant affiliation of CSR
disclosure and determinants of CG. Accordingly, others have suggested that sound CG is
affiliated with enhanced VED practices (Ienciu et al., 2012; Rao et al., 2012; Juliet, 2015).
Therefore, the study hypothesized that:
H3: Corporate Governance is related positively to environmental disclosure.

2.3.2 Corporate Governance, Environmental Performance and Environmental Disclosure

Corporate governance is a phenomenon that affects not only the financial performance but also
the social performance, and quality of financial reporting of the firm. It is "the system by which
companies are directed and controlled" (Cadbury Committee, 1992). There is a set of corporate
governance practices, including board size, Independence of the board, board expertise, board
gender diversity, ownership structure, etc. which affects different dimensions of environmental
performance differently. Although the results of some studies pointed out a direct or positive
relationship between corporate governance and environmental performance, however, there are
studies that show that the relationship between these two variables is inverse or indirect.

Studies conducted by Buniamin et al. (2011), Oba et al. (2012) and Iatridis (2013) indicates
that presence of efficient CG mechanisms enhances the quality of voluntary environmental
disclosure, and Dunstan (2008) Cormier et al. (2010) and Iatridis (2013) indicates that
consequently they disclose highly transparent and trustworthy environmental performance.
Further, Iatridis (2013) argued that information asymmetry and agency problems among
managers and stakeholders are reduced when CG discloses the environmental information
accurately. Moreover, Kesner et al. (1986), Lorsch et al. (1990), Bai et al. (2010) and Paloviita
et al. (2010) argued that BODs as the significant element of CG mechanisms determine and
oversee the implementation of firms' policies and strategies inclusive of environmental
concerns, to specific that firm aligned to the environmental laws and regulations. Therefore, it
is assumed that firms with efficient CG mechanisms will demonstrate improved environmental
performance that will guide firms to provide high quality of environmental disclosure.
Speaking differently, efficient CG mechanisms will explain enhanced environmental
performance that will influence the management to disclose high-quality environmental
information. Nevertheless, despite the developed and improved corporate business
environment, the effectiveness of good CG in environmental performance and its disclosure is
unanswerable. Hence, the attainment of diverse requirements of stakeholders is however,
ambiguous. Notwithstanding, regardless of the significance of corporate governance in
impacting improved environmental performance and disclosure, there is no previous research
that examined the role of corporate governance as a mediating variable in the affiliation of
environmental performance and environmental disclosure.

As discussed in the section 2.2.2, this study considers board composition (Board size, Board
independence, Board expertise, Female directorship, and CEO duality) and ownership structure
(institutional ownership, state ownership, block-holder ownership, managerial ownership, and
foreign ownership) for examining the mediating role of corporate governance.

2.4 Supporting Theories

2.4.1 Legitimacy Theory

"Legitimacy is a generalized perception or assumption that the actions of an entity are

desirable, proper, or appropriate within some socially constructed system of norms, values,
beliefs, and definition" (Suchman, 1995, p574). It was indicated that firms' management
pursues accord among the external conception of their own social values, along with the
societal considerations for appropriate social conduct (Mathews, 1993), which is considered as
organizational legitimacy. Lindblom (1994) defined legitimacy theory (LT) as: "a condition or
a status which exists when an entity's value system is congruent with the value system of the
larger social system of which the entity is a part, when a disparity, actual or potential, exists
between the two value systems, there is a threat to the entity's legitimacy" (p.2). It was
emphasized that LT concentrates on pursuing the conformity among the firms and societal
value systems, and attempts to create firms objective aligned with social expectancies.
According to Magness (2006), "Legitimacy theory was integrated into the accounting literature
as a means of explaining what, why, when, and how certain items are addressed by corporate
management in their communication with outside audiences." Further, Cormier and Gordon
(2001) asserted that it "rests on the concept that organizations have contracts with society and
fulfilling these contracts legitimates the organizations and their actions." As, "the social
contract would exist between corporations (usually limited companies) and individual
members of society, where society (as a collection of individuals) provides corporations with
their legal standing and attributes and the authority to own and use natural resources and to hire
employees" (Mathews, 1993 p31). Organizations are clinging upon outputs (goods and/or
services), resources of the community, and general environment (for waste product). Firms do
not have any inherent authority upon these benefits, and for allowing their existence, the city
will anticipate that benefits to increase societal costs. Wilmshurst and Frost (2000) argued that
under the framework of LT, firms are required to appropriate measures so that community with
accept their activities and performance.

Various researchers provided positive impacts of LT on affiliation among society and

corporation, as the legitimacy is bestowed and monitored by those who are external to the
corporations; therefore, it becomes obligatory for them to disclose information regarding their
activities to the general public (Buhr, 1998). Moreover, it was argued that firms operations
should be aligned with societal expectancies for their survival (Dowling and Pfeffer, 1975).
Furthermore, Elijido-Ten (2004) stated that LT imposed that firms are required to make the
firms' financial objectives consistent with the acceptable societal norms. Further, it suggested
that firms should incorporate the environmental and social concerns in making organizational
decisions.

It was proposed that resulting from three actions, firms become legitimate and further
strengthen their legitimacy (Dowling and Pfeffer, 1975). Firstly, firms should fallow their
operational methods, goals, and outputs to fulfill the requirements of legitimacy. Secondly, to
achieve the current organizational values, outputs, and practices should modify the connotation
of social legitimacy through proper intimation. Thirdly, firms again through proper suggestions
should attempt to become identifiable institutions, values, symbols that have a stronger
foundation of social legitimacy. Lindblom (1994) aligned these actions with four
communicational strategies. The proposed first action of Dowling and Pfeffer is aligned to the
first strategy, I .e. First, firms should communicate and train the interested stakeholders
regarding their factual alteration in their actions. The proposed second action of Dowling and
Pfeffer is aligned to the second and third strategy; i.e., second, should modify societal
expectancies through changing firms' behavior and third, should modify societal expectancies
without modifying firms' behavior. The proposed third action of Dowling and Pfeffer is aligned
to the fourth strategy i.e., firms should concentrate on positive responses and deviate the
societal interest away from the concerned issues.
It was indicated that the principal element that enhances the disclosure decisions to repair the
legitimacy (O'Donovan, 2002) mentioned that CSR disclosure would assist in overcoming the
firms' legitimacy issues (Neu et al., 1998). Further, indicated that mostly in annual reports,
VED would retain system-wide and firm-specific legitimacy. Conclusively, it means a stable
and closer affiliation among organizational legitimacy and disclosure. In the field of social and
environmental accounting, LT is considered as an explanatory theory of VED. LT has been
regarded as the foundation to survive for various environmental disclosure studies (Brown and
Deegan, 1998). LT has been tested in the work of "Intra-industry environmental disclosures in
response to the Alaskan oil spill" (Patten, 1992) and examined that "it appears that at least for
environmental disclosure, threats to a firm's legitimacy do entice the firms to include more
social responsibility information in its annual reports" (Patten, 1992, p475). Within the
framework of LT, a firm may adopt to provide certain social information to fortify its
occurrence in society. Public ownership, in contrast to private property, is significantly
impacted by the LT. As, Dowling and Pfeffer (1975) indicated that "while legitimacy is a
constraint on all organizations, it is likely that it affects some organizations more than others,
this is because … some organizations depend relatively more heavily on social and political
support" (p133) thus, LT is essential in various countries that have a higher percentage of
public ownership.

2.4.2 Voluntary Disclosure theory:

As already discussed, analytically and empirically, the determinants of voluntary disclosure

theory have been recognized as a significant area for research since 1970. Analytically, the
significance of voluntary disclosure has been examined under the framework of signaling
theory and agency theory (Meckling 1976; and Hughes 1986). Empirically, the optional
disclosure studies concentrated on the U.K. and U.S. (Firth, 1979; Meek et al., 1989; Cooke
1992). Researchers initiated to investigate the affiliation of VD and CG from the 1990s
(McKinnon et al., 1993; Chen et al., 2000; Eng et al., 2003; Akhtaruddin et al., 2009). Based
on prior studies examining the affiliation of environmental performance, VED, and CG, four
elements of CG are evident; family control, board composition, audit committee, and
ownership structure. Empirically among these elements, audit committee and family control
have consistent results. Therefore, the present study excludes these variables. Where,
inconsistency among board composition and ownership structure are found; hence present
study will incorporate board composition (Board size, Board independence, Board expertise,
Female directorship, and CEO duality) and ownership structure (institutional ownership, state
ownership, block-holder ownership, managerial ownership, and foreign ownership).

Research regarding VED is categorized into four types. Firstly to examine the quantity or/and
quality of VED (Hasseldine et al., 2005; Brammer et al., 2008; Moroney et al., 2011).
Secondly, to investigate the affiliation among VED and environmental performance (Ingram et
al., 1980; Freedman et al., 1996; Hughes et al., 2001; Patten 2002; Al-Tuwaijri et al. 2004;
Magness 2006; Kimbro et al., 2010). Thirdly, to examine the impact of VED on firm value
(Ingram, 1980; Belkaoui, 1976; Magness, 2006; and Plumlee et al., 2010) and fourth category
is to investigate the factors affecting VED (Hackston et al., 1996; Kent et al., 2003; Hossian et
al. 2006; Murcia et al., 2010; Zeng et al., 2012)

Empirically, based upon the prior studies on the affiliation between VED and CG
characteristics, there exist some common factors: Firstly, for measuring the VED content
analysis approach has been employed (Wilmshurst et al., 2000; Hossian et al., 2006; Buniamin,
2010; Mahadeo et al., 2011). Secondly, concluded that VED is affected positively by the size
and sensitivity of industry (Gray et al., 2001; Hossian et al., 2006; Brammer et al., 2008;
Branco et al., 2008; Liu et al., 2009; Mahadeo et al., 2011). Moreover, they have employed
leverage and profitability as control or independent variables (García-Ayuso and Larrinaga
2003; Hossian et al., 2006; Brammer et al., 2008; Branco et al., 2008; Murcia et al. 2010;
Mahadeo et al., 2011; Juhmani 2014)

2.4.3 Voluntary Disclosure

In the context of emerging markets, environmental disclosure is examined by (Tansey et al.,

2004), which indicated that increased environmental disclosure significantly overcome the
concerns regarding environmental issues of the organizations. It has been argued that for the
enhancement of transparency, disclosure is compulsory (Kanda, 1999). Further, it proves
helpful to firm' shareholders and other market players to function efficiently and should
prevent fraudulent behaviors. From the literature, two theories are evident regarding the
disclosure: (1) voluntary disclosure (VD); and (2) mandatory disclosure (MD). Among these
two theories (Ho and Wong, 2001), determinants of voluntary disclosure theory has been
recognized as a significant area for research since 1970, which has influenced various
researchers. The effect of voluntary disclosure is considered by Li and Qi (2008) and stated
that: "replenishes and deepens (mandatory) disclosure, and it has an important impact on
improving the quality of disclosed information and demonstrates the prospective and truthful
value of a company." Lo (2009) argued that among outsiders (investors and shareholders) and
insiders (directors and managers), it reduces the information asymmetry and strengthens the
outsiders' awareness of the company. Its development is characterized by various elements. It
was examined that with the enlargement of disclosures' regulations (Einhorn, 2005), the
voluntary disclosure will enlarge. In the context of the U.S., SOX is the "stringent act" that
fosters the CG under penalties of law that directly and/or indirectly strengthens the voluntary
disclosure. Voluntary disclosure in contrast to the mandatory disclosure is customarily and
frequently adopted for examining its affiliation with culture (Gray, 1988; Haniffa et al., 2002),
firm-level characteristics (Firth, 1979; Chow et al., 1987; Hossain et al., 1994) and CG (Ho et
al., 2001; Eng et al., 2003).

2.4.4 Categories of Voluntary Disclosure

According to Haniffa et al. (2002), in VD, non-accounting, and non-mandatory accounting

information are categorized into distinct kinds aligned to their functions and contents in an
annual report. Generally, for examining their affiliation with CG, their four categories are
considered comprised of: (1) general, (2) financial (3) CG, and (4) social and environmental
disclosure (Iskander, 2008). Other categories include; market, risk management, HR, and R&D
disclosures.

In annual reports, firms' general and strategic information disclosed is considered as the public
disclosure. Essential elements of general disclosure as listed by Barako et al. (2006) are: firms'
history/overview, organizational structure, comprehensive business strategy, goods or/and
services provided, and firms contribution towards national economy. Conclusively, it helps the
annual report users to comprehend the firms' basic knowledge and situation. Gibbins et al.
(1990) defined the financial disclosure as: “any deliberate release of financial information,
whether numerical or qualitative, required or voluntary, or via formal or informal channels." It
is further categorized into mandatory financial disclosure MFD and voluntary financial
disclosure VFD. Under the framework of laws, regulations, and standards (accounting and
reporting standards), MFD includes the financial statements and other financial information. In
contrast to MFD, VFD provides detailed financial data (Barako et al., 2006). Essential
elements of VFD, as listed by Barako et al., (2006), are: summary of yearly financial data,
complementary inflation-adjusted financial statements, and financial ratios. Moreover, it was
examined that VFD comprehensively provides financial information and firms' performance
(Iskander, 2008).

Issues concerning CG issues are of great significance for the firms. As continually, they
attained a higher degree of interest. Therefore, for improving the corporates' transparency, it
becomes significant to disclose CG information. The United Nations (2006) issued "Guidance
on Good Practices in Corporate Governance Disclosure" to help "the preparers of enterprise
reporting in producing disclosures on corporate governance which will address the major
concerns of investors and other stakeholders." Iskander (2008) defined VSED (voluntary social
and environmental disclosure) as: "the category of disclosure which reflects how the
corporation deals with its social responsibility and environmental influence." Essential
elements of VSED, as listed by Barako et al. (2006), are: morale and safety of employees, CSR
statement, environmental policy statement, and knowledge regarding environmental projects.
Freedman et al. (1982) and (1988) argued that firms that are sensitive to the environment are
required to document information, which significantly contributes information substance to
investors and prompt their reactions. Deegan et al. (1999) noted that: "environmental
information could be used for determining a number of issues such as whether to invest or lend
funds to an organization; whether to consume an organization's products; whether to use an
organization's products in the production process; and whether to supply labor or other
resources to the entity." As pointed out in the first objective (Financial Reporting by Business
Enterprises) in the Statement of Financial Accounting Concepts, the disclosed environmental
information is potentially adopted by "owners, lenders, suppliers, potential investors and
creditors, employees, management, directors, customers, financial analysts and advisors,
brokers, underwriters, stock exchanges, lawyers, economists, taxing authorities, regulatory
authorities, legislators, financial press and reporting agencies, labor unions, trade associations,
business researchers, teachers and students, and the public" (p.11, paragraph 24). The present
study mainly focuses the CG and environmental disclosure.

The two theories of voluntary disclosure and validity suggest that environmental disclosure be
related to environmental efficiency, but the reasons behind the disclosure are different from
two. The numerous explanations may also lead to variations in the contents of the declaration.
The pattern of various environmental information and information may vary from good to poor
performers. The main reason the right people are to distinguish themselves from the bad
performers is according to the theory of voluntary disclosure. Therefore, reliable and verifiable
environmental knowledge is provided by good performers (Clarkson et al., 2).

2.5 Good or bad environment differences:

The two theories of voluntary disclosure and validity suggest that environmental

disclosure be related to environmental efficiency, but the reasons behind the disclosure are

different from two. The numerous explanations may also lead to variations in the contents of the

declaration. The pattern of various environmental information and information may vary from

good to poor performers. The main reason the right people are to distinguish themselves from the

bad performers is according to the theory of voluntary disclosure. Therefore, robust and

verifiable environmental knowledge is provided by good performers (Clarkson et al., 2).

From a legitimacy theory point of view, the disclosure increases when poor performers

have their legitimacy at risk. Bad performers therefore have subjective and self-centered soft,

unverifiable disclosures. The main focus of the communication is to change the public opinion

(Clarkson et al., 2008; Clarkson et al., 2011). This is why the two theories show that

environmental disclosure patterns differ. We therefore suggest the hypothesis that follows;
 H3: Environmental disclosure trends differ between good environmental performers and

bad environmental performers.

Some businesses can break between excellent and poor performers at both ends. They are

classified as mixed performers in the group. These are the classes of the companies that meet

such specific environmental performance criteria. It is necessary to research the discovery

behavior of diverse performers. Since various performers have little achievement and have a

minimal credibility threat, they will report less than both good and bad performers according to

both the principle of voluntary disclosure and credibility. This leads to an assumption;

H4: Strong and weak performers both share more detail about the setting than mixed

performers.

2.5.1 Corporate governance indicators:

2.5.1.1 Board Size

Within the CG of any organization, BODs play an essential role in monitoring the firm's
performance. Htay et al. (2012) argued that efficiency is enhanced, having a small board size
that results in proper coordination and efficiently oversees the managerial decisions regarding
information disclosure. Moreover, CEOs sometimes purposely constitute the large board by
dispersing the boardroom power and becoming a dominant figure, consequently reducing the
probability of board members' integrated actions (Yoshikawa et al., 2003). Empirically it was
found that board size and environmental reporting are related negatively (Byard et al., 2006).
However, Board size significantly defines the level that organizations are holding in terms of
disclosure and transparency (Aktaruddin et al., 2009 and Hussain & Mallin 2003). As it is
argued, the level of disclosure increases with the increase in board size (Hussain & Mallin
2003). Aligned to this, Dalton et al. (1998) found similar results. They argued that
organizations are bestowed by a higher degree of intellectual knowledge, having a larger board
size that results in improved quality of strategic decisions; therefore, it positively impacts the
firm performance. It was examined that large size board is comprised of highly knowledgeable
and qualified people (Xie et al., 2003), and obtained a highly efficient reporting procedures that
ultimately enhances the voluntary disclosure levels inclusive of VED.

2.5.1.2 Board Independence

Directors that are part of the board but not full time employed with the company are termed as
outside directors, and these directors are contemplated as the essential part of agency theory
(Mallin, 2010) as they are charged with a high level of independent decision. Therefore, under
the framework of this theory, McIntyre et al. (2007) proposed that for efficient governance, it
is substantial to have more independent directors as they pursue their role in the most
independent way. Monitoring the activities and performance is the critical role being
performed by the independent directors that ultimately overcome the agency problems (Fuzi et
al., 2016); therefore, it is suggested to have a proportion of independent directors on the board
for better oversight functioning to monitor the risk and control. Being self-employed, they are
required to perform their assigned tasks without the guidance, directions, and pressure of
stakeholders. Hence, participate in the decision making actively by presenting individualistic
and autonomous views and conclusions. They continuously monitor the management's
activities to uphold the stakeholders' interests and maximize their value. Moreover, Aktaruddin
et al. (2009) stated the importance of increasing independent directors on the board as, by
doing so, the possibility of transparency in that organization will become more as compared to
other organizations. O'Connor and Byrne (2015) argued that Independence and discipline are
the things that improve firms as mature, and when firms are knowledgeable, they tend to be the
most accountable and transparent. Malik and Makhdoom (2016) argued that the independent
board should improve the transparency in the board in making decisions freely and without any
hesitation.

Owning independent members not only contributes towards improved performance rather more
appropriate and well-advised governance (Wallison, 2006). All the listed companies are
required by SECP to enroll the majority of independent directors, so that BODs become able to
perform their roles and duties appropriately (Corporate Governance Code, 2013). Empirically
Huafang et al. (2007), Barros et al. (2013) Jouirou et al. (2014) Majeed wt al. (2015) Lone et
al. (2016) regarding affiliation between board independence and CSR have examined that
independent directors significantly impacts the CSR disclosure. With more Independence,
managers are compelled to undertake favorable decisions concerning environmental
performance (Ienciu et al., 2012; Rao et al., 2012; Wang, 2016). Furthermore, firms that
demonstrated dynamic environmental concerns have higher board independence. Hence, a
positive relationship between board independence and environmental disclosure is expected.

2.5.1.3 Board Expertise

The predicted sign of the above-considered BODs characteristics i.e., BOD Size, and
Independence is positive, which indicated that it's not only the size of the board that matters;
however, their Independence is also very significant. As, majority of literature and studies now
support that board size, which is occupied by more independent directors have a positive
impact on the performance and disclosure practices (Wallison, 2006; Jouirou et al., 2014;
Majeed wt al., 2015; Malik and Makhdoom, 2016). Moreover, in the past two decades, their
expertise has come under increased scrutiny, and researchers argued that in addition to their
Independence their knowledge is also very significant (Carpenter and Westphal, 2001;
Yermack, 2006; VanNess et al., 2010; Gîrbină, Albu, & Albu 2012). If they have a strong
financial background, they provide more insight. As the strategic decisions are performed by
these board members, and if they are educated and experts in their field, they can better serve
the company.

Ilaboya & Obaretin (2015) also conducted a study, and the results of the study showed that the
expertise of the board members significantly and positively affected the performance of the
firm. When board members possess the essential knowledge about the accounting principles, it
will increase their oversight, and they will be able to serve the shareholder interest in a better
way. Along with this, Kor & Sundaramurthy (2009) asserts that the internal control mechanism
is more reliable in firms where directors have more financial background and experience, and it
affects the performance of firms positively. Prior study has not examined the relationship
between board expertise and environmental disclosure.
2.5.1.4 Female Directorship

Concerning board diversity, Adamas et al. (2004) examined that having female directors on
board substantially impacts the firm performance along with the disclosure practices (financial
as well as non-financial). Rao et al. (2012) argued that they are highly philanthropically driven,
committed, and diligent and significantly enhance the firms' performance. Ibrahim et al. (1994)
and Lone et al. (2016) argued that in contrast to the men, female directors foster highly
humanitarian concern. Barako et al. (2008) demonstrated that transparency and accountability
is enhanced by female directors. Empirically, real affiliation has been examined between CSR
disclosure and female directorship (Cuadrado-Ballesteros, 2015).

Under the framework of stakeholder theory, Webb et al. (2008) and Burritt et al. (2010)
supported the conception that in contrast to men women are more socially oriented (Hussain et
al., 2018), foster efficient stakeholders' management and enhances the Independence of board
consequently social accountable behavior. Moreover, Rao et al. (2012) endorsed that an
increasing number of female directors lead towards more independent board that enhances the
likelihood of disclosing enhanced corporate environmental disclosure. Based upon the
proposition concerning the female directors' monitoring potential along with the prospect of
stakeholder theory, it can be affirmed that thoughtfulness, Independence, and commitment of
female directors along with various other characteristics enable the female directors to
efficiently take part in corporate decision making the disclosure practices particularly. Hence, a
significant positive affiliation exists between female directorship and environmental disclosure.

2.5.1.5 CEO-Duality

One of the essential elements that influence environmental and social reporting is the role of
the CEO (Adams, 2002). According to the concept of CEO duality, the "decision-making
authority" and "controlling authority" are sanctioned to the sole member that overcome the
agency obstruction (Belkhir 2009), directing enhanced organizational performance. Moreover,
Belkhir (2009) documented that boards are efficiently catered to accomplish organizational
goals resulting from CEO duality. However, Chapra and Ahmed (2002) recorded that for
protecting the stakeholders' interest boards should significantly split this role. Nevertheless,
regulators suggested that "two most influential roles within a company should not be held by
the same person" (UK Corporate Governance Code, 2016). Similarly, SECP recommended
splitting this role (Corporate Governance Code, 2013). Moreover, within the perspective of
agency theory, "discrete leadership structure" is supported (Jensen et al., 1979; Fama et al.,
1983; Jensen 1993). Therefore, it can be considered that an independent board gained through
a distinct leadership structure will lead to improved and efficient firms' environmental
disclosure, hence shielding stakeholders' interest.

Empirically, the affiliation of CEO duality and level of disclosure reveals contrary results. For
instance, researchers failed to found any substantial relationship between them (Ho et al., 2001;
Michelon et al., 2012; NuHtay, 2004). It was indicated that duality supports CEO entrenchment
by declining boards monitoring efficacy (Florackis, 2008). Further, it was found that lower
levels of voluntary disclosure are associated with duality (Haniffa et al., 2002). Aligned to
Haniffa et al. (2002), various researchers have found positive affiliation of separate leadership
framework and disclosure (Samaha et al., 2015; Hussain et al., 2018, Byard et al. 2006, Gisbert
et al., 2013).

2.5.1.6 Institutional Ownership

According to Shan (2009), one of the significant elements of CG is concentrated or dispersed

ownership structure. Lakhal (2005) proposed that ownership structure quantified as the number
of shares held by institutional owners inclusive of insurance companies, mutual funds,
endowment funds, pension funds, and banks etc. is termed as institutional ownership (IO).
Generally, it is assumed that the presence of IO decreases the effectiveness and efficacy of the
board. Accordingly, it was argued that separating control and ownership consequently requires
increased firms' information disclosures (Jensen et al., 1979). Therefore, it would be concluded
that IO decreases the likelihood of providing increased corporate environmental disclosure.

Boards' decision-taking authority is confined due to a significant stake of investors in the firm
(Jensen et al., 1979; Lakhal, 2005) that ultimately declines the activism and autonomy of the
board. Notwithstanding, no strong affiliation between IO and environmental disclosure is
found ((Donnelly, 2008; Gisbert et al., 2013; Jouirou et al., 2014; Albawwat et al., 2015).
However, Shan (2009) and Alhazaimeh et al. (2014) found that IO and corporate disclosure are
related negatively. Theoretically, under the framework of agency perspective, Barako et al.
(2006) stated that "institutional investors have strong incentives to monitor corporate
disclosure practices and influence corporate values." Similarly, under the stakeholder
perspective, Welford (2007) stated that high transparency and accountability is required by the
institutional investors and are affiliated positively with voluntary corporate disclosure inclusive
of VED. Aligned to these theoretical perspectives, empirically real affiliation among IO and
VED was examined (Rao et al., 2012). Further, argued that they are dynamic owners and have
a more significant stake in firms, therefore, corporate and management values are influenced
by them. Resulting from these theoretical perspectives and empirical evidence, it can be
assumed that IO enhances the probability of providing increased VED.

2.5.1.7 State Ownership

Under the framework of stakeholder perspective and unique features of ownership in Pakistani
listed firms, management is required to fulfill the disclosure requirement of state ownership
(SO), as SO has sufficient authority to decide the position of managers. Empirically it was
examined that in the annual report, the large size of firms and elements of being state-owned
enterprise discharge the dynamic role in driving environmental reporting practice (Wiseman,
1982). In the context of Chine, it was examined that SO is affiliated positively to the VED
(Zeng et al., 2012), and results of OLS indicated that VED increases with SO. Dam and
Scholtens (2012) aligned to OECD (2010), argued that in the majority of countries,
governments significantly aims to improve the quality of social and environmental concerns.
Khongmalai et al. (2010) demonstrated that the critical objective of SO is to provide the states'
social purpose as well as to bestow due attention to the demands of other stakeholders inclusive
of the general public, local communities, customers, and employees. Resulting from the
increased public interest regarding social and environmental concerns, higher VED is
demanded by these stakeholders. Hence, managers to protect their positions are required to
disclose environmental information to cater to these stakeholders.

Moreover, green industries and green energy are structuring the future trends. Better
environmental disclosure will bring market advantages and opportunities for businesses to
firms by having exceptional standards for environmental (KPMG, 1997) along with improved
public relationships. SO requires high VED to build the rules of Pakistani business and to
influence other domestic as well as foreign investors to strengthen and further develop the
economy of Pakistan.

2.5.1.8 Managerial Ownership

When the essential portion of ordinary shares is held by the executives, senior managers and
CEO is termed as managerial ownership (MO). Accordingly, they are considered as principal
stakeholders in addition to the agent-stakeholders. Resulting from the splitting of agent and
primary agency problem arises. When MO in the form of principal-stakeholder is higher, it
might reduce the agency problem as the interest of MO and principal-stakeholders become
aligned (Jensen and Meckling, 1976), and with lower MO outsider principal-stakeholders are
required to enhance the agency cost for dealing with the hurdles of monitoring the agent
actions. Therefore, for decreasing the agency and monitoring costs, managers prefer to enhance
the voluntary disclosure. Additionally, VED fosters to improve firms' reputation. Hence, it's a
better way to increase the managers' performance to fulfill the requirements of all the
stakeholders.

Empirically Li and Qi (2008) examined that firms having higher MO discloses a higher level of
VED. Donnelly and Mulcahy (2008) observed that VED is expected to increase when the MO
inclined towards shareholders; in contrast, VED is expected to decrease when the MO inclined
towards management. Moreover, Donelly et al. (2008) documented that resulting from the
increased MO; it becomes captivated and exempted from monitoring, consequently lead to a
lack of incentive for management to provide voluntary information. In the context of
Singapore, Eng and Mak (2003) examined the negative affiliation of MO and voluntary
disclosure. CSR disclosure is significantly influenced by ownership structure along with board
composition "by the choices, motives, and values of those who are involved in formulating and
making decisions in the organization" (Khan et al., 2013). Empirically they examined that MO
negatively impacts the CSR disclosure.
2.5.1.9 Foreign Ownership

According to Broberg et al. (2010), foreign ownership (FO) means a high degree of
asymmetric information because of distinct attitudes, languages, culture, and risk. Hence, they
argued that FO requires more disclosure. Managers provide senior details to overcome the
misinterpretations and fundamental conflicts among foreign shareholders and themselves.
Additionally, companies are now also listed on other countries' stock exchanges; thus, Xiao et
al. (2007) argued that they are liable to fulfill the standards of those countries as well.
Therefore, companies are required to disclose more information to strengthen their relations
with the prevailing shareholders as well as to attract foreign investors. Empirically, Aksu and
Kosedag (2006) suggested that FO lead towards lower levels of corporate disclosure. Aligned
to this, Mangena and Tauringana (2007) found that FO significantly and negatively impacts the
corporate disclosure. However, their work was contradicted by the findings of Bokpin and
Isshaq (2009), who found the significant positive affiliation of FO and corporate disclosure.
Moreover, FO's significant positive impact on corporate reporting exercises was examined
(Singhvi, 1968). Similarly, it was observed that FO positively impacts the voluntary disclosure
(Haniffa and Cooke, 2002). Further, Mangena et al. (2007) also found a positive affiliation
with FO and disclosure practices. Furthermore, it has been examined that FO discharge
fundamental role in motivating organizations to enhance CSR disclosure (Khan et al., 2013).

2.5.1.10 Block-holder Ownership

Investors who own 5% or above than 5% ordinary shares are referred to as block-holder
ownership (BO). BO is concentrated as it indicates that a smaller group of people control the
shares. Noe (2002) argued that concentrated ownership handles the monitoring practices
efficiently, to restrain managers from deprivation of resources for exclusive benefits. Based
upon this assumption, larger Block-holders are required to motivate managers to disclose high
information, for increasing prices of shares and firm value. In contrast, when a more significant
portion of the equity is owned by the investors, they gain the required information from the
firm's inside sources. Hence, Marston and Polei (2004) argued that highly closed held firms
probably disclose lower information, as their key investors can approach required information
from inside sources. Under the framework of the stakeholder perspective, a smaller group of
stakeholders leads toward few stakeholders to contract. Generally, to fulfill the requirements of
various stakeholders, voluntary disclosure is provided. Hence, resulting from the smaller group
of stakeholders, a lower level of information is disclosed by the management. Empirically, the
real affiliation of BO and voluntary disclosure was examined (Haniffa and Cook, 2002).
Similarly, in the context of China, Huafang and Jianguo (2007) indicated that high BO is
affiliated significantly to an enhanced level of voluntary disclosure. However, in Malaysia's
context, no significant relationship was evident between the two variables (Eng and Mak,
2003). Negative affiliation of BO and environmental disclosure has been examined by various
researchers in different countries like Malaysia (Hossain et al., 1994), Finland (Schadewitz et
al., 1998), Germany (Marston et al., 2004), U.K. (Zourarakis, 2009), etc. Moreover, in the
context of British firms, Zourarakis (2009) investigated the affiliation of CG and voluntary
disclosure and indicated that BO and voluntary disclosure are associated negatively.

Prior studies documented that firms in their annual reports with effective CG discloses better
environmental disclosure (Ho and Wong, 2001; Haniffa et al., 2005; Huafang et al., 2007;
Michelon et al., 2012; Barros et al., 2013; Sharif et al., 2014; Majeed et al., 2015; Lone et al.,
2016). It is also documented that CG is affiliated positively with better environmental
performance (Greeno, 1993; Weir et al., 2001; Boesso et al., 2007; Delmas et al., 2009; Orij,
2010). Therefore it is concluded that effective CG mediates the quality of VED with better
environmental performance.

As already discussed, information asymmetry and principal-agent issues are reduced through
corporate environmental disclosure within the framework of agency perspective. Firms with
efficient CG are sensitive towards the stakeholders' requirements, hence will provide more
environmental disclosures (Gul et al., 2004; Dunstan, 2008; Buniamin et al., 2010; Oba et al.,
2012; Iatridis, 2013). Such firms will also abide by the federal and state laws inclusive of laws
and regulations of the environment and, in their operation, implement environmentally friendly
strategies. Subsequently, better environmental performance will be shown by these firms.
Verrecchia (1983) argued that firms that have better environmental performance would
probably provide environmental disclosure to influence investors about their accomplishments.
Therefore, Al- Tuwaijri et al. (2004) proposed that firms will provide "hard environmental
disclosure" (confusing, verifiable and quantifiable, to imitate environmental information). In
contrast, firms with poor CG will have little concerns regarding social and environmental
issues, hence probably overlook specific environmental laws. Accordingly, poor environmental
performance will be shown by such firms. Hughes et al. (2001) proposed that firms will
provide "soft environmental disclosure" regarding common polices of environment like waste
reduction policy.

Conclusively, by disclosing highly quantifiable and verifiable environmental information,

capable CG firms mediate the quality of environmental disclosure. This research work intends
that firms with effective CG mechanisms have practices to oversee and evaluate the
environmental compliance and performance. Speaking differently, effective CG lead towards
better environmental performance, and the firm will provide environmental disclosure to
satisfy.
 CHAPTER 3
Theoretical Framework
Conceptual framework

Env.
Environmental
Performance Mediating role
Disclosure

Corporate

Governance

Env.

Good/Bad

Mixed testing
Hypothesis

Performer

H1: Environmental performance is related positively to environmental disclosure.

H2: Corporate Governance is related positively to environmental performance.

H3: Environmental disclosure trends differ between good environmental performers and bad

environmental performers.

H4: Strong and weak performers both share more detail about the setting than mixed performers.

H5: Corporate Governance has a mediating role in the relationship.

 CHAPTER 4
RESEARCH METHODOLOGY

4.1 Introduction

This chapter provides the details of the variables used in the study. It presents the
methodological framework, which will be followed for data collection and analysis in order to
examine the objectives of the study.

4.1 Measurement of Variables

4.1.1 Dependent Variable (Environmental Disclosure)

Initially, for measuring environmental disclosure, an index based upon the work of Clarkson
(2008) along with the basis of reporting guidelines "Global Reporting Initiative Sustainability"
has been constructed using content analysis approach. However, later on, the index has been
modified aligned to the situation in Pakistan. Therefore, for Pakistani firms, the ultimate
archive or list is considered practical and accurate in depicting practices of environmental
reporting in sustainability and annual reports. The ultimate index is comprised of total 40 items
of environmental information categorized into nine major heads, namely A(1) Governance
structure and management systems, A(2) Firms Environmental Concerns and Statement, A(3)
Environment Management system and initiative, A(4) Environmental Expenditure, Investment
and Technology, A(5) Environmental performance improvement A, (6) Pollutant control and
resource consumption, A(7) Significant environmental issues and impacts, A(8) Compliance
with environmental regulations and A(9) Public welfare along with other environmental
activities. Details are provided in table 3.1.
 Table 4.1 Environmental Disclosure Items

A(1) Governance structure and management systems

(i). For environment management, management positions and/or pollution control department
exists
(ii). Inboard CSR, public and/or environmental issue committee exists
(iii). For customers and/or suppliers, terms and conditions regarding environmental practices
exists
(iv). Executive compensation is affiliated with the environmental performance
(v). Training to raise environmental awareness
(vi). Stakeholders involvement while establishing environmental strategies
A(2) Firms Environmental Concerns and Statement
(i). Statement of doctrines concerning environment protection by top executives
(ii). Environmental protection plan, goals and policy
(iii). Taken measures for monitoring compliance with policy
(iv). Formal management systems’ statement concerning environmental performance and risk
(v). Firms’ statement to periodically review and evaluate the environmental performance
(vi). Statement of SMART goals concerning future environmental performance
(vii). Statement concerning definite new technologies and/or environmental innovations
A(3) Environment Management system and initiative
(i). knowledge concerning the environmental system, i.e. ISO 14001
(ii). “Environment Management and Operation” training to employees.
(iii). External environmental Rewards and/or Honor
(iv). In annual reports, independent certainty about disclosed environmental information
(v). Employment of Environmental Management Accounting
(vi). For environmental uncertainties presence of response plans
(vii). Internal environmental audits
A(4) Environmental Expenditure, Investment and Technology
(i). Investment expenditures related to the environmental friendly products/services
(ii). Innovation in technology for treating generated waste recycles
(iii). Environmental related government funds subsidies and funds
(iv). Resulting from the environmental initiative's summary of dollar savings to the company
(v). For enhancement of environments’ efficiency and/or performance spent amount on R&D
and technologies.
A(5) Environmental performance improvement
(i). Reduction in discharged pollutants like gas per unit of product, wasted water
(ii). Statement concerning the environmental benefit of energy conservation and pollutant control
A(6) Pollutant control and resource consumption
(i). Reduction in degree and quantity of solid waste, gas emission and disposal of toxic substance
A(7) Significant environmental issues and impacts
(i). Environmental regulations’ violation and punishments
(ii). Statement if the PEPA has listed it as "severely polluting enterprise."
(iii). Local community complains and/or collective environmental petition cases
(iv). For environmental issues, paid fines
(v). Overview of how the environment is impacted by firm products and/or services
(vi). Environmental performance comparative analysis with other industries
A(8) Compliance with environmental regulations
(i). Statement concerning "pollutant of Gas emission" reached on specific environmental
standards
(ii). Statement concerning solid waste along with various affluent treatments as per law
(iii). The advancement schedule of overall emission decline at the firm and/or plant level
(iv). Environmental analysis of construction project aligned to law
A(9) Public welfare, along with other environmental activities
(i). Review of activities concerning environmental public welfare (like biodiversity conservation
and tree plantation)
(ii). Review of potential environmental influences upon acid rain, Ozone layer and global
warming

4.2.2 Independent Variable (Environmental Performance)

For measuring environmental performance, various researchers have employed different

techniques. Frequently employed measure is the firms' "environmental performance rating
indicator." However, to evaluate the environmental performance of Pakistani firms, various
factors are considered. Firstly, for encouraging environmental performance, the "National
forum for environmental and health" provide awards to firms. Secondly, "Environment
Protection Agency of Pakistan" lists the polluting companies. And "Pakistan Environmental
Tribunal" lists the firms that fail to fulfil the national environmental laws. Hence, they are
considered as good data sources to conduct research. Moreover, the present study categorized
the firms into the good, bad and mixed performance as mentioned in the section 2.3.1 of the
proposal. Therefore, based upon the above discussion, specific requirements are considered for
significantly differentiating the good performers and examining the environmental
performance. They are:

1. National forum for environmental and health has awarded the environmental excellence
award
2. Put in place environmental management system like "ISI 14001."
3. Environment Protection Agency of Pakistan has not listed the company as a polluting
company

In contrast, based upon the imposed environmental violations and penalties, the present study
identifies the bad performers. Under the "Ministry of Environment Pakistan" the "Pakistan
Environmental Tribunal" on periodic essential lists the firms that fail to fulfil the requirements
(laws and regulations) of the political environment. On the other hand, mixed performers are
the one; who fulfil one or more requirements of good performers as mentioned above;
however, fails to meet all the mentioned requirements.

4.2.3 Mediating Variable (Corporate Governance)

To examine the mediating role of C.G., ten different variables are considered as disclosed in
Table 3.2 below:

Table 4.2 Corporate Governance Variables

Variables Operational Definition Symbol

Board Size Total members of board B.S.
Board Independence Total independent members of board B.I.
Board Expertise Terminal degree in finance or economics B.E.
Female Directorship Total female members of the board FD
CEO Duality Dummy variable set equals to 1 CEO and Chairman is CD
 same, otherwise 0
Institutional Number of shares held by institutional owners I.O.
ownership
State ownership Number of shares held by institutional owners SO
Managerial Number of shares held by the executives, senior MO
ownership managers and CEO
Foreign ownership Number of shares held by foreigners FO
Block-holder Investors who own 5% or above than 5% ordinary shares B.O.
ownership

4.2.3 Control Variables

To examine the mediating role of C.G. in affiliation among environmental performance and
environmental disclosure, three firm performance variables are employed as control variables
as disclosed in Table 3.3 below:

Table 3.3 Control Variables

Variables Operational Definition Symbol

Firm Size Natural logarithm of firms’ total assets FSIZE
Leverage The ratio of total liabilities to total assets LEV
Profitability Net profit to total assets ROA
Environment Dummy variable set equals to 1 for environmentally INDUSTRY
sensitivity sensitive industries, 0 otherwise
4.3 Research Design

The primary purpose of this research is to examine the mediating role of C.G. in the affiliation
among environmental performance and environmental disclosures of Pakistan. Data will be
collected from 2015 to 2019 from annual reports of Pakistani listed firms.

4.3.3 Population

The population of this research includes the firms listed at Pakistan Stock Exchange (PSX)
which includes firms from all sectors. Total 38 sectors are listed at PSX, which comprised of
11 financial sector and 27 non-financial sectors. However, the disclosure requirements of the
financial and non-financial sectors are different; therefore, this study will consider only listed
non-financial firms. Total 388 firms are listed in the 27 non-financial sectors.

4.3.4 Sample

There does not exist any database that provides secondary data regarding the non-financial
listed firms. Thus, it becomes difficult to collect the data of all the non-financial listed firms.
Therefore, the population of the study is further sampled so that data can be collected quickly
and without any errors. Accordingly, the study will employ the data of 5 listed firms from all
the non-financial sectors of PSX, which comprised of 135 firms in total. However, as the data
for variables of the study will be collected manually; hence, there are chances that few firms
will be excluded from the sample due to non-availability of complete data.

4.3.5 Model Specification

In order to analyze the mediating role of corporate Governance, I used SEM equation. I used
structure equation modeling in order to check mediating role because its deliver us the path
diagram and total direct and indirect effect simultaneously. In order to test the casual
relationship or correlation between variables presented in chapter 2 four correlation matrix will
be employed: Model (I) will be employed to examine the affiliation among environmental
performance and environmental disclosure. Model (II) will be employed to examine the
affiliation among corporate Governance and environmental performance. Model (III) will be
employed to examine the affiliation among corporate Governance and environmental
disclosure. Where, Model (IV) will be employed to examine the affiliation among
environmental performance, environmental disclosure and corporate Governance.

SEM for mediating role Equation:

CG=β 0+ β Ep × ED Xi+ € cgi

ED=α 0+α Ep ×Cg yi+€ EDi

Correlation matrix

EDit = βo + β1EPit + β2Xit + Ɛit ---------- (I)

EPit = βo + β1CGit + β2Xit + Ɛit ---------- (II)

EDit = βo + β1CGit + β2Xit + Ɛit ---------- (III)

EDit = βo + β1EPit + β2CGit + β3Xit + Ɛit ---------- (IV)

Where; i go from firm 1 to firm 135 and t takes the values of the years from 2015 to 2019. β
parameters are estimated coefficients for each of the explanatory variables. ED it is the matrix of

environmental disclosure. EPit is the matrix of environmental performance.

CGit Represents
matrix of corporate governance variables. Xit is the matrix of control variables, and Ɛit is the
random error term.

4.4 Chapter Conclusion

This chapter starts by defining the variables employed in the study that comprised of a
dependent variable (environmental disclosure), the independent variable (environmental
performance), mediating variable (corporate Governance) and control variables (firm size,
leverage profitability and industry). Next section of the chapter provides that the study will
incorporate the data of 5 listed firms from all the non-financial sectors of PSX, which
comprised of total 135 firms for the period of 2015 to 2019. At the end, the regression models
are defined to examine the relationship between variables.
References

Adams, C. A. (2002). Internal organizational factors are influencing corporate social and
ethical reporting—accounting, Auditing & Accountability Journal.

Adams, R. B., & Ferreira, D. (2004). Gender diversity in the boardroom. European Corporate
Governance Institute, Finance Working paper, 57, 30.

Agrawal, A., & Chadha, S. (2005). Corporate governance and accounting scandals. The
Journal of Law and Economics, 48(2), 371-406.

Akhtaruddin, M., M. A. Hossain, et al. (2009). "Corporate Governance and Voluntary

Disclosure in Annual Corporate Reports of Malaysian Listed Firms." JAMAR Vol. 7 (Number
1).

Alam, S., Fatima, A., & Butt, M. S. (2007). Sustainable development in Pakistan in the context
of energy consumption demand and environmental degradation. Journal of Asian
Economics, 18(5), 825-837.

Albawwat, A. H., & Ali, Basah, M. (2015). Corporate Governance and voluntary disclosure of
interim financial reporting in Jordan. Journal of Public Administration and Governance, 5(2),
100-127.

Alhazaimeh, A., Palaniappan, R., & Almsafir, M. (2014). The impact of corporate governance
and ownership structure on voluntary disclosure in annual reports among listed Jordanian
companies. Procedia-Social and Behavioral Sciences, 129, 341-348.

Al-Tuwaijri, S. A., Christensen, T. E., & Hughes, K. (2004). The relations among
environmental disclosure, environmental performance, and economic performance: a
simultaneous equations approach. Accounting, Organizations and Society, 29(5), 447-471.

Ansoff, I. (1965). Corporate Strategy. New York, McGraw-Hill.

Baden, D., Harwood, I., & Woodward, D. (2009). The effect of buyer pressure on suppliers in
SMEs to demonstrate CSR practices: An added incentive or counterproductive? European
Management Journal, 27(6), 429–441.

Bai, C., & Sarkis, J. (2010). Integrating sustainability into supplier selection with grey system
and rough set methodologies. International Journal of Production Economics, 124(1), 252–264.

Barako, D. G., & Brown, A. M. (2008). Corporate social reporting and board representation:
evidence from the Kenyan banking sector. Journal of Management & Governance, 12(4), 309.

Barako, D. G., Hancock, P., & Izan, H. Y. (2006). Factors influencing voluntary corporate
disclosure by Kenyan companies. Corporate Governance: an international review, 14(2), 107-
125.

Barros, C. P., Boubaker, S., & Hamrouni, A. (2013). Corporate Governance and voluntary
disclosure in France. Journal of Applied Business Research (JABR), 29(2), 561-578.

Bebbington, J., Unerman, J., & O'Dwyer, B. (2014). Sustainability Accounting and
Accountability: Routledge.

Beekes, W., Brown, P., Chin, G. & Zhang, Q. (2016). The effect of corporate Governance on
information disclosure, timeliness and market participants' expectations. Available at SSRN:
http://dx.doi.org/10.2139/ssrn.2122300

Belkaoui, A. (1976). The impact of the disclosure of the environmental effects of

organizational behaviour on the market. Financial management, 26-31.

Belkhir, M. (2009). Board structure, ownership structure and firm performance: evidence from
banking. Applied financial economics, 19(19), 1581-1593.

Bewley, K., & Li, Y. (2000). Disclosure of environmental information by Canadian

manufacturing companies: a voluntary disclosure perspective. In Advances in Environmental
Accounting & Management (pp. 201-226): Emerald Group Publishing Limited.
Boesso, G., & Kumar, K. (2007). Drivers of voluntary corporate disclosure: A framework and
empirical evidence from Italy and the United States. Accounting, Auditing & Accountability
Journal, 20(2), 269–296.

Brammer, S. and S. Pavelin (2008). "Factors influencing the quality of corporate

environmental disclosure." Business Strategy and the Environment 17((2)): pp. 120-136.

Branco, M. and L. Rodrigues (2008). "Factors Influencing Social Responsibility Disclosure by

Portuguese Companies." Journal of Business Ethics 83(4): 685-701.

Brown, N. and C. Deegan (1998). "The public disclosure of environmental performance

information - a dual test of media agenda setting theory and legitimacy theory." Accounting
and Business Research Vol.29(1): pp.21-41.

Buhr, N. (1998). "Environmental Performance, Legislation and Annual Report Disclosure: The
Case of Acid Rain and Falconbridge." Accounting, Auditing and Accountability Journal Vol.
11(2): pp.163-190.

Buniamin, S. (2010). "The Quantity and Quality of Environmental Reporting in Annual Report
of Public Listed Companies in Malaysia." Issues in Social and Environmental Accounting
Vol.4(No.2): pp.115-135.

Burritt, R. L., Schaltegger, S., & Orij, R. (2010). Corporate social disclosures in the context of
national cultures and stakeholder theory. Accounting, Auditing & Accountability Journal.

Byard, D., Li, Y., & Weintrop, J. (2006). Corporate Governance and the quality of financial
analysts' information. Journal of Accounting and Public policy, 25(5), 609-625.

Carpenter, M.A. and Westphal, J.D. (2001), ‘‘The strategic context of external network ties:
examining the impact of director appointments on board involvement in strategic decision
making’’, Academy of Management, Vol. 44 No. 4, pp. 639-60.
Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility:
A review of concepts, research and practice. International Journal of Management Reviews,
12(1), 85-105.

Chapra, M. and Ahmed, H. (2002), Corporate Governance in Islamic finance, Islamic

Development Bank, Jeddah.

Chen, C. J. P. and B. Jaggi (2000). "Association between independent non-executive directors,

family control and financial disclosures in Hong Kong." Journal of Accounting and Public
Policy 19(4-5): 285-310.

Chow, C. W. and A. Wong-Boren (1987). "Voluntary Financial Disclosure by Mexican

Corporations." The Accounting Review 62(3): 533-541.

Clarkson, P. M., Overell, M. B., & Chapple, L. (2011). Environmental reporting and its
relation to corporate environmental performance. Abacus, 47(1), 27-60.

Cooke, T. E. (1992). "The Impact of Size, Stock Market Listing and Industry Type on
Disclosure in the Annual Reports of Japanese Listed Corporations." Accounting & Business
Research 22(87): 229-237.

Cormier, D. and I. M. Gordon (2001). "An examination of social and environmental reporting
strategies." Accounting, Auditing & Accountability Journal Vol. 14 (Iss: 5): pp.587 - 617.

Cuadrado-Ballesteros, B., Rodríguez-Ariza, L., & García-Sánchez, I. M. (2015). The role of

independent directors at family firms in relation to corporate social responsibility
disclosures. International Business Review, 24(5), 890-901.

De Villiers, C., & Van Staden, C. J. (2006). Can less environmental disclosure have a
legitimizing effect? Evidence from Africa. Accounting, Organizations and Society, 31(8), 763-
781.

De Villiers, C., & Van Staden, C. J. (2011). Where firms choose to disclose voluntary
environmental information. Journal of Accounting and Public Policy, 30(6), 504-525.
Deegan, C. & Rankin, M. (1996). Do Australian companies report environmental news
objectively? An analysis of environmental disclosures by firms prosecuted successfully by the
environmental protection authority. Accounting, Auditing and Accountability Journal, 9(2), 50-
67.

Deegan, C. (2002). The legitimizing effect of social and environmental disclosures - a

theoretical foundation. Accounting, Auditing and Accountability Journal, 15(3), 282-311.

Deegan, C. and J. Unerman (2006). Financial Accounting Theory. McGraw-Hill Education,

Maidenhead.

Deegan, C. and M. Rankin (1999). "The Environmental Reporting Expectations GAP:

Australian Evidence." The British Accounting Review 31(3): 313-346.

Delmas, M., & Montiel, I. (2009). Greening the supply chain: When is customer pressure
effective? Journal of Economics & Management Strategy, 18(1), 171–201. https://
doi.org/10.1111/j.1530-9134.2009.00211.

Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance
and shareholder returns. Australian Journal of Management, 16(1), 49-64.

Donnelly, R., & Mulcahy, M. (2008). Board structure, ownership, and voluntary disclosure in
Ireland. Corporate Governance: An International Review, 16(5), 416-429.

Dowling, J. and J. Pfeffer (1975). "Organizational legitimacy: social values and organizational
behaviour." Pacific Sociological Review Vol.18(1): pp.122-36.

Dryzek, J. S. (2013). The politics of the earth: Environmental discourses: Oxford University
Press.

Dunstan, K. (2008). The case for the use of international reporting standards in New
commission. Working paper. Victoria University of Wellington, Wellington, New Zealand.
23–25 December.
Einhorn, E. (2005). "The Nature of the Interaction between Mandatory and Voluntary
Disclosures." Journal of Accounting Research, Vol. 43 ((4)): pp. 593-621.

Elijido-Ten, E. (2004). Determinant of Environmental Disclosures in a developing country: An

application of the stakeholder theory. Accepted for Presentation at the Fourth Asia Pacific
Interdisciplinary Research in Accounting Conference, Singapore.

Eng L. L. & Mak Y. T. (2003). Corporate Governance and voluntary disclosure. Journal of
Accounting and Public Policy, 22, 325-345

Environmental Performance and Disclosure." Journal of Business Finance and Accounting

12(3): pp. 339-354.

Fama, E. (1983). F. & JENSEN M. C.(1983a): Separation of Ownership and Control, in:
Journal of Law & Economics, 26(2), 301-325.

Firth, M. A. (1979). "The effect of size, stock market listings, and auditors on voluntary
disclosure in corporate annual reports." Accounting & Business Research Vol.9(No.36):
pp.273-

Florackis, C. (2008). Agency costs and corporate governance mechanisms: evidence for U.K.
firms. International Journal of Managerial Finance.

Freedman, M. and B. Jaggi (1982). "Pollution disclosures, pollution performance and

economic performance." Omega, 10(2): pp.167-176.

Freedman, M. and B. Jaggi (1988). "An Analysis of the Association between Pollution
Disclosure and Economic Performance " Accounting, Auditing & Accountability Journal
Vol.1(2): pp43-58.

Freedman, M. and B. Jaggi (1996). "Association between environmental performance and

environmental disclosure: an assessment." Adv Account 14:161.
Freedman, M., & Wasley, C. (1990). The association between environmental performance and
environmental disclosure in annual reports and 10Ks. Advances in Public Interest Accounting,
3(2), 183-193.

Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach, Cambridge

University Press

Fuzi, S. F. S., Halim, S. A. A., & Julizaerma, M. K. (2016). Board Independence and Firm
Performance. Procedia Economics and Finance, 37, 460-465.

García-Ayuso, M. and C. Larrinaga (2003). "Environmental disclosure in Spain: Corporate

(Special Issue for the 26th Annual Congress of the European Accounting Association, Seville,
Spain).

Giannarakis, G., Konteos, G., Sariannidis, N., & Chaitidis, G. (2017). The relation between
voluntary carbon disclosure and environmental performance: The case of S & P 500.
International Journal of Law and Management (just-accepted), 00-00.

Gibbins, M., A. Richardson, et al. (1990). "The Management of Corporate Financial

Disclosure: Opportunism, Ritualism, Policies, and Processes." Journal of Accounting Research
28(1): 121-

Gibson, K. & O’Donovan, G. (2007). Corporate Governance and environmental reporting: an

Australian study. Corporate Governance: An International Review, 15(5), 944-956.

Gilkinson, B. (1994). "Accounting for degradation: the Mapua problem revisited." Chartered
Accountants Journal: September pp.54-9.

Gîrbină, M. M., Albu, C. N., & Albu, N. (2012). Board Members’ Financial Education and
Firms’ Performance: Empirical Evidence for Bucharest Stock Exchange Companies.
International Journal of Economics and Management Engineering, 6(9), 2343-2347.
Gisbert, A., & Navallas, B. (2013). The association between voluntary disclosure and corporate
Governance in the presence of severe agency conflicts. Advances in Accounting, 29(2), 286-
298.

Graves, S. B. and S. A. Waddock (1994). "Institutional Owners and Corporate Social

Performance." The Academy of Management Journal 37(4): 1034-1046.

Gray, R. H., D. L. Owen, et al. (1996). Accounting and accountability: Changes and challenges
incorporate social and environmental reporting. London, Prentice-Hall.

Gray, R., Adams, C., & Owen, D. (2014). Accountability, social responsibility and
sustainability: Accounting for society and the environment: Pearson Higher Ed.

Gray, R., Javad, M., Power, D. M., & Sinclair, C. D. (2001). Social and environmental
disclosure and corporate characteristics: A research note and extension. Journal of Business
Finance & Accounting, 28(3‐4), 327-356.

Gray, S. J. (1988). "Towards a Theory of Cultural Influence on the Development of

Accounting Disclosures." Journal of Accounting Research, Vol. 43 ((4)): pp. 593-621.

Gul, F.A. & Leung, S. (2004). Board leadership, outside directors’ expertise and voluntary
corporate disclosures. Journal of Accounting and Public Policy, 23(5), 351-379.

Guthrie, J. and L. D. Parker (1990). "Corporate social disclosure practise: a comparative

international analysis." Advances in public interest accounting Vol. 3(3): pp.159-175.

Hackston, D. and M. J. Milne (1996). "Some determinants of social and environmental

disclosures in New Zealand companies." Accounting, Auditing & Accountability Journal Vol.
9 (Iss: 1): pp.77 - 108.

Hamilton, K. (2004). The need for effective communication with market stakeholders.
Australian Accounting Review, 14(32), 3-8.
Haniffa, R. M., & Cooke, T. E. (2002). Culture, Corporate Governance and disclosure in
Malaysian corporations. Abacus, 38(3), 317-349.

Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and Governance on corporate
social reporting. Journal of accounting and public policy, 24(5), 391-430.

Hasseldine, J., A. I. Salama et al. (2005). "Quantity versus quality: the impact of environmental
disclosures on the reputations of U.K. PLCs." The British Accounting Review 37(2): 231-248.

Ho, S. S. M. and K. S. Wong (2001). "A study of the relationship between corporate
governance structures and the extent of voluntary disclosure." Journal of International
Accounting, Auditing and Taxation 10(2): 139-156.

Hopwood, A. G. (2009). Accounting and the environment. Accounting, Organizations and

Society, 34(3), 433-439.

Hossain, M., K. Islam, et al. (2006). Corporate Social and Environmental Disclosure in
Developing Countries: Evidence from Bangladesh. Research Online is the open access
institutional repository for the University of Wollongong.

Hossain, M., L. M. Tan, et al. (1994). "Voluntary disclosure in an emerging capital market:
some empirical evidence from companies listed on the Kuala Lumpur Stock Exchange."
International Journal of Accounting Vol. 29 (No. 4): pp. 334-51.

Hossain, M., L. M. Tan, et al. (1994). "Voluntary disclosure in an emerging capital market:
some Journal of Accounting Vol. 29 (No. 4): pp. 334-51.

Htay, S. N. N., Rashid, H. M. A., Adnan, M. A., & Meera, A. K. M. (2012). Impact of
Corporate Governance on social and environmental information disclosure of Malaysian listed
banks: Panel data analysis. Asian Journal of Finance & Accounting, 4(1), 1-24.

Huafang, X., & Jianguo, Y. (2007). Ownership structure, board composition and voluntary
corporate disclosure: Evidence from listed companies in China. Managerial Auditing Journal,
22(6), 604-619
Hughes, P. J. (1986). "Signalling by direct disclosure under asymmetric information." Journal
of Accounting and Economics 8(2): 119-142.

Hughes, S. B., Anderson, A., & Golden, S. (2001). Corporate environmental disclosures: are
they useful in determining environmental performance? Journal of Accounting and Public
Policy, 20(3), 217-240.

Hughes, S. B., J. F. Sander, et al. (2000). "Do environmental disclosures in U.S. annual reports
differ by environmental performance? in (ed.) 1." Advances in Environmental Accounting &
Management Volume 1: Emerald Group Publishing Limited, pp.141-161.

Hummel, K., & Schlick, C. (2016). The relationship between sustainability performance and
sustainability disclosure–Reconciling voluntary disclosure theory and legitimacy theory.
Journal of Accounting and Public Policy, 35(5), 455-476.

Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate governance and sustainability
performance: Analysis of triple bottom line performance. Journal of Business Ethics, 149(2),
411-432.

Hussain, S. H., & Mallin, C. (2003). The dynamics of corporate Governance in Bahrain:
structure, responsibilities and operation of corporate boards. Corporate Governance: an
international review, 11(3), 249-261.

Iatridis, G. E. (2013). Environmental disclosure quality: Evidence on environmental

performance, corporate Governance and value relevance. Emerging Markets Review, 14(1),
55–75. https://doi.org/10.1016/j.ememar.2012.11.003

Ibrahim, N. A., & Angelidis, J. P. (1994). Effect of board members gender on corporate social
responsiveness orientation. Journal of Applied Business Research (JABR), 10(1), 35-40.

Ienciu, I. A. (2012). The relationship between environmental reporting and corporate

governance characteristics of Romanian listed entities. Accounting and Management
Information Systems, 11(2), 267-294.
Ilaboya, O. J., & Obaretin, O. (2015). Board Characteristics and Firm Performance: Evidence
from Nigerian Quoted Companies. Academic Journal of Interdisciplinary Studies, 4(1), 283.

Ingram, R. W., & Frazier, K. B. (1980). Environmental performance and corporate disclosure.
Journal of Accounting Research, 614-622.

Iskander, A. E. (2008). The relationship between auditing expectations gap and voluntary
corporate disclosure: Egyptian evidence / Amir Emil Iskander. [Durham]: xi, 375 p.

Jensen, M. C. and W. H. Meckling (1976). "Theory of the firm: Managerial behaviour, agency
costs and ownership structure." Journal of Financial Economics 3(4): 305-360.

Jensen, M. C., & Meckling, W. H. (1979). Theory of the firm: Managerial behaviour, agency
costs, and ownership structure. In Economics, social institutions (pp. 163-231). Springer,
Dordrecht.

Jouirou, M., & Chenguel, M. B. (2014). The determinants of voluntary disclosure in Tunisia: A
study of the firms listed in the Tunisian Stock Exchange. Journal of Business and Management
Research, 4(1), 84-95.

Juhmani, O. (2014). "Determinants of Corporate Social and Environmental Disclosure on

Websites: The Case of Bahrain." Universal Journal of Accounting and Finance 2(4): 77-78.

Juliet, O. O. (2015). The effect of corporate Governance on the extent of environmental

reporting in the Nigerian oil industry. International Journal of Business and Social
Science, 6(10).

Kanda, H. (1999). Disclosure and Corporate Governance: a Japanese perspective. Corporate

Governance in ASIA: a comparative perspective, OECD.

Kassinis, G., & Vafeas, N. (2002). Corporate boards and outside stakeholders as determinants
of environmental litigation. Strategic Management Journal, 23(5), 399–415.
Kimbro, M. B. and S. R. Melendy (2010). "Financial performance and voluntary
environmental disclosures during the Asian Financial Crisis: the case of Hong Kong."
International Journal of Business Performance Management v. 12 (no. 1): pp. 72-85

Kirkpatrick, G. (2009). The corporate governance lessons from the financial crisis. OECD
Journal: Financial Market Trends, 2009(1), 61-87.

Kor, Y. Y. & Sundaramurthy, C. (2009). Experience-based human capital and social Capital of
Outside Directors. Journal of Management, 35(4), 981-1006.

Laidroo, L. (2009). Association between ownership structure and public announcements’

disclosures. Corporate Governance: An International Review, 71(1), 13-34.

Lakhal, F. (2005). Voluntary earnings disclosures and Corporate Governance: Evidence from
France. Review of Accounting and Finance.

Lang, M., & Lundholm, R. (1993). Cross-sectional determinants of analyst ratings of corporate
disclosures. Journal of Accounting Research, 246-271.

Li, D., Zhao, Y., Sun, Y., & Yin, D. (2017). Corporate environmental performance,
environmental information disclosure, and financial performance: Evidence from China.
Human and Ecological Risk Assessment: An International Journal, 23(2), 323-339.

Li, H. and A. Qi (2008). "Impact of corporate governance on voluntary disclosure in Chinese

listed companies." Corporate Ownership & Control Volume 5(Issue 2, Winter 2008-
Continued3): v

Lindblom, C. K. (1994). The implications of organizational legitimacy for corporate social

performance and disclosure. Paper presented at the Critical perspectives on accounting
conference, New York.

Liu, S. (2009). The determinants and economic effects of increased corporate disclosure: The
case of China. Accountancy. Aberdeen, The University of Aberdeen. Doctor of Philosophy:
269.
Liu, X. and V. Anbumozhi (2009). "Determinant factors of corporate environmental
information disclosure: an empirical study of Chinese listed companies." Journal of Cleaner
Production Vol.17(6): p593-600.

Liu, Z., Liu, T., McConkey, B., & Li, X. (2011). Empirical analysis on environmental
disclosure and environmental performance level of listed steel companies. Energy Procedia, 5,
2211-2218.

Lone, E. J., Ali, A., & Khan, I. (2016). Corporate Governance and corporate social
responsibility disclosure: evidence from Pakistan. Corporate Governance: The International
Journal of Business in Society.

Lu, W., & Taylor, M. E. (2017). A study of the relationships among environmental
performance, environmental disclosure, and financial performance. Asian Review of
Accounting, (just-accepted), 00-00.

Magness, V. (2006). "Strategic posture, financial performance and environmental disclosure:

An empirical test of legitimacy theory." Accounting, Auditing & Accountability Journal Vol.
19 (Iss: 4): pp.540 - 563.

Mahadeo, J. D., V. Oogarah-Hanuman, et al. (2011). "A Longitudinal Study of Corporate

Social Disclosures in a Developing Economy." Journal of Business Ethics 104(4): 545-558.

Mahmood, Zeeshan; Ahmad, Zubair; Ali, Waris; Ejaz, Aneela (2017): Does environmental
disclosure relate to environmental performance? Reconciling legitimacy theory and voluntary
disclosure theory, Pakistan Journal of Commerce and Social Sciences (PJCSS), ISSN 2309-
8619, Johar Education Society, Pakistan (JESPK), Lahore, Vol. 11, Iss. 3, pp. 1134-1152

Majeed, S., Aziz, T., & Saleem, S. (2015). The effect of corporate governance elements on
corporate social responsibility (CSR) disclosure: An empirical evidence from listed companies
at KSE Pakistan. International Journal of Financial Studies, 3(4), 530-556.

Malik, M. S., & Makhdoom, D. D. (2016). Does corporate Governance beget firm performance
in fortune global 500 companies?. Corporate Governance.
Malik, N. (2014). Corporate Social Responsibility and Development in Pakistan: Routledge.

Mallin, C. (2010). Corporate Governance. 3rd Edition. Oxford: Oxford University Press.

Marie L’Huillier, B. (2014). What does “corporate governance” actually mean? Corporate
Governance, 14(3), 300-319.

Marston, C. & Polei, A. (2004). Corporate reporting on the internet by German companies.
International Journal of Accounting Information Systems, 5, 285–311

Mathews, M. R. (1993). Socially Responsible Accounting. London, Chapman & Hall

Mathews, R. (2008). Personal reflections on a tale of two books: social and environmental
accounting research in the past, present and future. Australian Accounting Business & Finance
Journal, 2(1), 1-13.

McKinnon, J. L. and L. Dalimunthe (1993). "Voluntary disclosure of segment information by

Australian diversified companies." Accounting & Finance 33(1): 33-50.

Meek, G. K. and S. J. Gray (1989). "Globalization of Stock Markets and Foreign Listing
Requirements: Voluntary Disclosures by Continental European Companies Listed on the
London Stock Exchange." Journal of International Business Studies 20(2): 315-336.

Meng, X. H., S. X. Zeng, et al. (2013). "From Voluntarism to Regulation: A Study on

Ownership, Economic Performance and Corporate Environmental Information Disclosure in
China." Journal of Business Ethics Volume 116(Issue 1): pp. 217-232.

Meng, X., Zeng, S., Shi, J. J., Qi, G., & Zhang, Z. (2014). The relationship between corporate
environmental performance and environmental disclosure: An empirical study in China.
Journal of Environmental Management, 145, 357-367.

Michelon, G., & Parbonetti, A. (2012). The effect of corporate Governance on sustainability
disclosure. Journal of Management & Governance, 16(3), 477-509.
Milne, M. J., & Patten, D. M. (2002). Securing organizational legitimacy: An experimental
decision case examining the impact of environmental disclosures. Accounting, Auditing &
Accountability Journal, 15(3), 372-405.

Moroney, R., C. Windsor, et al. (2011). "Evidence of assurance enhancing the quality of
voluntary environmental disclosures: an empirical analysis." Accounting & Finance: pp1-37.

Murcia, F. D. R. and A. D. Santos (2010). Determinants of Corporate Voluntary Disclosure in

Brazil.

Neu, D., Warsame, H. & Pedwell, K. (1998). Managing public impressions: environmental
disclosures in annual reports. Accounting, Organizations and Society, 23(3), 265-282.

Noe, T. (2002). Institutional activism and financial market structure, Review of Financial
Studies, 15, 289-319

NuHtay, S. N., & Salman, S. A. (2004) Simultaneous Relationship among Market

Performance, Risk and Disclosure Quality: Empirical Evidence from Malaysian Listed Banks.

Oba, V., & Fodio, M. (2012). Board characteristics and the quality of environmental reporting
in Nigeria. The Journal of Accounting and Management, 2(2), 33–48.

O'Donovan, G. (2002). "Environmental disclosures in the annual report: extending the

applicability and predictive power of legitimacy theory." accounting, Auditing &
Accountability Journal Vol.15: pp.344-71.

Orij, R. (2010). Corporate social disclosures in the context of national cultures and stakeholder
theory. Accounting, Auditing & Accountability Journal, 23(7), 868–889

Paloviita, A., & Luoma-aho, V. (2010). Recognizing definitive stakeholders incorporate

environmental management. Management Research Review, 33(4), 306–316

Patten, D.M. (1991). Exposure, legitimacy and social disclosure. Journal of Accounting and
Public Policy, 10(4), 297-309.
Patten, D.M. (1992). Intra-industry environmental disclosures in response to the Alaskan oil
spill: a note on legitimacy theory. Accounting, Organizations and Society, 17(5), 471-475.

Patten, D.M. (2002). The relation between environmental performance and environmental
disclosure: a research note. Accounting, Organizations and Society, 27(8), 763-773.

Peiyuan, G. (2005). Corporate environmental reporting and disclosure in China. Social

Responsibility Journal, 3(3), 26-34.

Pellegrini, M., & Grais, W. (2006). Corporate Governance and Shariah compliance in
institutions offering Islamic financial services. World Bank, Policy Research working paper
No. WPS4054.

Plumlee, M. A., D. Brown, et al. (2010). Voluntary Environmental Disclosure Quality and
Firm Value: Further Evidence.

Rafique, M. A., Malik, Q. A., Waheed, A., & Khan, N. (2017). Corporate Governance and
environmental reporting in Pakistan. Pakistan Administrative Review, 1(2), 103-114.

Rao, K. K., Tilt, C. A., & Lester, L. H. (2012). Corporate Governance and environmental
reporting: an Australian study. Corporate Governance: The international journal of business in
society.

Roberts, R. W. (1992). "Determinants of corporate social responsibility disclosure: An

application of stakeholder theory." Accounting, Organizations and Society 17(6): 595-612.

Rockness, J. W. (1985). "An Assessment of the Relationship Between U.S. Corporate

Salama, A. (2003). The relationship between corporate environmental disclosure,

environmental reputation, and firm financial performance: U.K. evidence, University of
Nottingham.
Samaha, K., Khlif, H., & Hussainey, K. (2015). The impact of board and audit committee
characteristics on voluntary disclosure: A meta-analysis. Journal of International Accounting,
Auditing and Taxation, 24, 13-28.

Sen, M., K. Mukherjee, et al. (2010). "Firm Characteristics and Corporate Environmental
Disclosure Practices in India." The IUP Journal of Accounting Research & Audit Practices
Vol. IX (No. 4): pp. 24-41.

Shan, G. Y. (2009, February). Related party disclosures in China: influences of factors

identified from agency, legitimacy, and signalling theories. In Symposium SA, Adelaide.
http://www. symposiums. org/Shan% 20_2008_.

Sharif, M., & Rashid, K. (2014). Corporate Governance and corporate social responsibility
(CSR) reporting: empirical evidence from commercial banks (C.B.) of Pakistan. Quality &
Quantity, 48(5), 2501-2521.

Suchman, M. C. (1995). "Managing Legitimacy: Strategic and Institutional Approaches."

Academy of Management Journal Vol. 20(3): pp. 571 - 610.

Sun, N., A. Salama, et al. (2010). "Corporate environmental disclosure, corporate governance
and earnings management." Managerial Auditing Journal Vol. 25 (No. 7): pp. 679-700.

Sutantoputra, A., Lindorff, M., & Johnson, E. P. (2012). The relationship between
environmental performance and environmental disclosure. Australasian Journal of
Environmental Management, 19(1), 51-65.

Tansey, R., R. Carroll, et al. (2004). "A social representations model of environmental
disclosures in emerging markets " Problems and Perspectives in Management Vol.2(3): pp.
121-

Tilt, C.A. (1994). The influence of external pressure groups on corporate social disclosure:
some empirical influence. Accounting, Auditing and Accountability Journal, 7(4), 47-72.
Van Ness, R. K., Miesing, P. & Kang, J. (2010). Board of director composition and financial
performance in a Sarbanes-Oxley. Academy of Business and Economics Journal 10 (5), 56-74

Verrecchia, R. E. (1983). Discretionary disclosure. Journal of Accounting and Economics, 5,

179-194.

Wallison, P. J.( 2006). All the Rage: Will Independent Directors Produce Good Corporate
Governance? American Enterprise Institute for Public Policy Research

Wang, H., Bi, J., Wheeler, D., Wang, J., Cao, D., Lu, G., & Wang, Y. (2004). Environmental
performance rating and disclosure: China's GreenWatch program. Journal of Environmental
Management, 71(2), 123-133.

Wang, J. and B. S. Coffey (1992). "Board composition and corporate philanthropy." Journal of
Business Ethics 11: pp. 771-778.

Wang, M. C. (2016). The relationship between environmental information disclosure and firm
valuation: the role of corporate Governance

Webb, D. J., Mohr, L. A., & Harris, K. E. (2008). A re-examination of socially responsible
consumption and its measurement. Journal of business research, 61(2), 91-98.

Weir, C., & Laing, D. (2001). Governance structures, director independence and corporate
performance in the U.K. European Business Review, 13(2), 86–95.

Welford, R. (2007). Corporate governance and corporate social responsibility: issues for
Asia. Corporate Social Responsibility and Environmental Management, 14(1), 42-51.

Wijnberg, N. M. (2000). "Normative Stakeholder Theory and Aristotle: The Link Between
Ethics and Politics " Journal of Business Ethics Volume 25(4): pp329-342.

Wilmshurst, T. D. and G. R. Frost (2000). "Corporate environmental reporting. A test of

legitimacy theory." Accounting, Auditing & Accountability Journal Volume:13(Number:1):
pp:10-26.
Wise, V. & Ali, M. (2008). Case studies on corporate Governance and corporate social
responsibility. South Asian Journal of Management, 15(3), 136-150.

Wiseman, J. (1982). An evaluation of environmental disclosures made in corporate annual

reports. Accounting, Organizations and Society, 7(1), 53-63.

Xie, B., Davidson III, W. N., & DaDalt, P. J. (2003). Earnings management and corporate
Governance: the role of the board and the audit committee. Journal of corporate finance, 9(3),
295-316.

Yoshikawa, T., & Phan, P. H. (2003). The performance implications of ownership-driven

governance reform. European Management Journal, 21(6), 698-706.

Zourarakis, N. S. (2009). Voluntary disclosure: Evidence from U.K. [Online] Available:

http://www.efinancialnews.com/story/2010-12-15/walker-transparency-regulation-buyout

The creation of a credible proxy for environmental performance in a business is the leading

research principle problem in this report. The literature has well established the difficulties in

estimating environmental efficiency (see, for instance, Ilinitch et al., 1998). Because in this

analysis we are assessing the relative performance of our climate, following the current

publications and using the actual data of pollution discharge from the TRI database of the USA

Environmental protection agency ( EPA) we establish our relative environmental performance

proxy (King & Lenox, 2001). We explicitly first calculate, as reported by the EPAs in 2005

(EPAs report annual data at the plant level with a two-year delays), the overall toxic release (in

pounds) and toxic waste handled or processed for each of our sampling companies in 2003. We

compared TRI measures obtained at the firm level with those provided in the proprietary
information base for the Investor Responsibility Research Center to check the accuracy of our

aggregation process. The differences were notoriously low.