A Conceptual Paper: The Mediating Effect of CSR on Corporate Governance and Leverage

  • Afshan UNISEL
  • Aza Azlina
Keywords: Corporate governance, Corporate social responsibility, leverage, board structure, ownership structure, audit committee, CSR disclosure, debt to asset ratio

Abstract

Background: Corporate governance (CG) is the most inspiring system of today’s business world. In developed countries it is already regarded as a basic tool of doing a business and in developing countries the growing importance has been recognized by authorities and researchers. Governance structure influences the decision-making process of a businesses including financing decisions. It is very important for a firm to keep optimal level of capital structure particularly to keep balance the interest of all stakeholders. At the same time, governance structure reflects in corporate social responsibility to be more transparent and honest with the stakeholders. This not only create positive reputation of a business but also provide opportunities to firms to use finances at low cost and keep a balance in capital structure.

Purpose: The objective of this research is to explore and evaluate the relationship of CG variables with Capital structure with mediating effect of Corporate Social Responsibilty (CSR). To study the relationship CG variables are board structure, audit committee and ownership structure, whereas CS can be measured with Debt to asset ratio and CSR will be measure with CSR disclosure.

 Methodology: This study will be based on secondary data, which includes annual reports of listed companies at MSM for the period of 2016-2019.

Results: It is believed that the result of current study will support the hypothesis that strong CG will allow firms to have better capital access and CSR mediates the relationship.

Findings & Implications: Firstly, this research will more contribute the exisiting literature because such type of study has not been conducted, CSR has not been used as mediating between CG and CS. Secondly, this research interest is important particularly in Oman where development started a few last decades.

Published
2020-02-04
How to Cite
Afshan, & Azlina, A. (2020). A Conceptual Paper: The Mediating Effect of CSR on Corporate Governance and Leverage. Postgraduate Research Symposium - January 2020, 1(1). Retrieved from http://ojs.journals.unisel.edu.my/index.php/prsj20/article/view/13