The role of audit committees in social responsibility and environmental disclosures: evidence from Chinese energy sector

• Published in: International journal of disclosure and governance Vol. 19; no. 1; pp. 113 - 128
• Main Authors: Wang, Junhui, Sun, Jerry
• Format: Journal Article
• Language: English
• Published: London Palgrave Macmillan UK 01.03.2022; Palgrave Macmillan
• Subjects: Accounting/Auditing; Audit committees; Audits; Business and Management; Committees; Corporate Finance; Corporate Governance; Disclosure; Gender differences; Original Article; Social responsibility; China; M14; Q56; Directors; Environmental disclosures; G34; Audit committees; Social responsibility
• ISSN: 1741-3591; 1746-6539
• DOI: 10.1057/s41310-021-00131-3

This study investigates the role of Chinese audit committees in social responsibility and environmental disclosures. We examine whether audit committee characteristics are related to the disclosures. By using a balanced panel dataset of Chinese energy firms and firm fixed-effects regressions, we find that audit committees’ female representation is positively associated with the likelihood of issuing social responsibility reports and the level of environmental disclosures. Nevertheless, there is no consistent evidence that some conventional measures of audit committee effectiveness including audit committee independence and financial expertise can positively affect the disclosures. The findings suggest that female audit committee members are more effective in enhancing the disclosures than their male counterparts, which may pose a demand for the presence of more female directors on Chinese audit committees. Meanwhile, there is room for Chinese audit committee members to extend their oversight role. This study enriches the research on the role of audit committees in social responsibility and environmental disclosures, which has been little addressed in the literature.