Journal
INTERNATIONAL CONFERENCE EMERGING MARKETS QUERIES IN FINANCE AND BUSINESS
Volume 3, Issue -, Pages 961-967Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/S2212-5671(12)00258-4
Keywords
environmental reporting; corporate governance; environmental committee; board independence; petroleum companies; voluntary reporting
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Because environmental reporting remains voluntary on an international level, there are major differences in terms of the quality and quantity of environmental information, reported by entities from varied industries and countries. Starting from the agency theory, the company is accountable for the decision to report environmental information, decision which is made by the management to serve for the best interest of the shareholders (Buniamin et al., 2011: 56). Within this study, we would therefore focus on certain factors related to the entity's internal characterstics, consisting mainly in how the entity is managed, in order to identify if good corporate governance practices explain the voluntary environmental reporting. The research is conducted as an empirical study which explains how the disclosure of environmental information varies across the largest entities operating in the petroleum industry and reflects factors that could account for these variations. The paper identifies the corporate governance characteristics such as the percentage of independent directors and the existence of an environmental committee as factors that explain the variation in environmental information disclosure. We conclude that in order to secure the transparency of environmental performance within a company, the board should ensure a sufficiently number of independent members able to exercise an independent reasoning for solving potential conflicts of interests. Also, the environmental committee monitors the company's activity in terms of its environmental impact, bringing about increasing transparency regarding the environmental aspects. (C) 2012 Published by Elsevier Ltd. Selection and/or peer review under responsibility of Emerging Markets Queries in Finance and Business local organization
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