**3.4. Proportion of female directors on the board and environmental reporting**

within the board. Furthermore, the board independence reduces the conflicts of interests among the multiple shareholders and the management thus leading to the minimization of agency costs [19]. From the perspective of stakeholder theory, independent directors are seen as accountability mechanism [18], as they have responsibility for a wider variety of stakeholders [45, 47]. The 2013 Corporate Governance Code issued by Securities & Exchange Commission of Pakistan (SECP) requires all listed companies to have majority of independent non-executive directors on their board, thus facilitating the board to discharge its duties and responsibilities appropriately. Regarding the association between independence of board and CSR reporting [13–15, 21, 22, 54] empirically found a significant impact of the existence of non-executive independent managers

According to Refs. [24, 25, 55] boards having more independent non-executive directors compel managers to take favorable decisions regarding the firm's environmental performance. Moreover, the firms demonstrating active environmental concern proved to have more independent directors on their boards. Therefore, we hypothesize a significant positive relationship between the proportion of independent non-executive directors on the board and the

:*The level of environmental reporting is positively associated with the proportion of independent* 

Role of CEO has been incorporated as one of the significant factor influencing the corporate environmental and social reporting by Adams [56]. It is believed that the "CEO duality" or "dominant personality phenomenon", i.e. the positions of CEO and the chairman held by the same person can lessen the efficiency of the board in screening the management activities [10, 57]. The 2013 Corporate Governance Code released by the SECP also recommends the separate role between the CEO and chairman of the board. The authors in [42, 58, 59] proposed discrete leadership structure on the basis of agency theory. Hence, it could be assumed that the board independence attained by separate leadership framework will direct to a better and effective environmental and social reporting about the companies, thus protecting interest of

The literature shows contrary results with regard to the practice of separation between the executive manager and the chairman of the board and the level of reporting. Furthermore, the authors in [9, 19, 60] found no substantial association between the separate leadership structure and the level of reporting. Florackis and Ozkan [50] argued that the dual role endorses CEO entrenchment by decreasing monitoring efficacy of board. Haniffa and Cooke [10] found that role duality is linked with lesser voluntary disclosure. Consistent with the arguments, the authors in [17, 45, 52, 61] found a positive association between disclosure and separate leadership framework. Finally, it is anticipated that separate leadership structure will enhance the

**3.3. Practice of separation between the chief executive officer and chairman of the** 

on CSR disclosure.

the shareholders.

**H2**

150 Globalization

extent of environmental reporting:

*non-executive directors on the board.*

**board and environmental reporting**

extent of environmental reporting by the firm:

Board diversity in terms of proportion of women on the board has been documented as having a substantial effect on firm performance and disclosure of both financial and nonfinancial matters [62]. Female directors are more diligent, committed, philanthropically driven and make effective contribution to the firm performance [25]. Ballesteros et al. [63] also documented a positive relationship between the proportion of female directors and level of CSR disclosure. Female directors exhibit more philanthropic concern as compared to men [22, 64] enhancing information transparency and accountability [65].

In line with stakeholder theory, the authors in [66, 67] endorsed the view that women are socially oriented than men, develop effective stakeholder management and increase the board independence and thus social responsible behavior [45]. Furthermore, higher percentage of female directors on the board leads to the board independence and thus increases the probability of providing enhanced corporate environmental reporting [25]. On the basis of the above arguments about the monitoring potential of female directors and rationale offered by stakeholder theory, it can be asserted that female director's commitment, independence, thoughtfulness and other attributes enable them to actively participate in corporate decision making concerning disclosure practices. Therefore, we hypothesized a significant positive relationship between the proportion of female directors on the board and the level of environmental reporting:

**H4** :*The level of environmental reporting is positively related to the proportion of female directors on the board.*
