Sustainability Committee Effectiveness and CSR Assurance

Abstract

This study investigates the impact of sustainability committee effectiveness on a company’s voluntary choice to obtain Corporate Social Responsibility (CSR) assurance. This voluntary assurance engagement has a high degree of variation that allows firm management to negotiate the assurance engagement with assurance providers. Results indicate that the existence of a sustainability committee and committee effectiveness are not associated with the decision to obtain assurance for CSR reports; however, sustainability committee effectiveness influences the details of the assurance engagement. When a firm’s sustainability committee is more effective, it is more likely to obtain a high level of assurance, use ISAE 3000 as criteria, choose accounting firms as assurance providers and assure a narrower scope of CSR information. This study forms a novel examination of the sustainability committee as a corporate governance mechanism.

Keywords: Sustainability Committee, CSR, CSR Assurance, Corporate Governance

JEL Classification: G34, M42, M14