Top Management Team Heterogeneity,Corporate Social Responsibility Disclosure And Performance

The lack of study on corporate social responsibility(CSR)in Nepalese industry is a serious problem that cannot be ignored.In recent years,corporate social responsibility has become a central concept in the domain of corporate entrepreneurship,received substantial conceptual and empirical attention.The CSR disclosure activity encourages business community to join hands in resolving conflict and involve in the peace process.The traditional idea thinks that corporate social responsibility will increase the cost of organization,harm the economic efficiency.But with the deepening of researchers,with the deterioration of the environment as well as social contradictions,more and more organization begin to realize that,social responsibility is not only the demand of the society,is also an effective way of shaping the corporate image,expanding organization influence,getting social support and developing the competitiveness of organization.At the same time,after the events experienced economic crisis,industrial transformation and upgrading of various markets,organization begin to realize the importance of human resources,especially the inseparable relationship between the construction and the development of the organization's top management team.Throughout the existing research,scholars discussed this issue only from the perspective of corporate characteristics,strategic management and firm performance but there is lack of integration of different theoretical perspectives.At the same time,existing studies ignore the role of top manager on enterprises strategic decision and choices.At present,foreign scholars have begun research on top managers cognitive and values issues from sociology and psychology perspective,but empirical research on top management team(TMT)heterogeneity,corporate social responsibility disclosures strategy(CSRD)and financial performance has not been perfect,but lack of appropriate studies under the Nepalese cultural background.According to the upper echelons theory,TMT heterogeneity will be reflected in strategic choices and financial performance.Given their central role in organizations and their decisive influence on organizational strategy,it has been argued that exploring the underlying mechanisms which can help to explain how TMTs influence organizational outcomes is important.In view of this,the paper draw domestic and foreign research results,combined with the practical background of Nepalese banking sector.This paper systematically analyzes the influence factors and economic consequences of organization social responsibility information disclosure,TMT heterogeneity dimensions,the research literature on the relationship among corporate social responsibility disclosure,top management team heterogeneity and financial performance is based on legitimacy theory,upper echelons theory and stakeholder theory,this paper selects the top 29 banks listed in Nepal Stock Exchange(NEPSE)for the year 2012-2017 as the research object,study the relationship between top management team heterogeneity,corporate social responsibility disclosures strategy and financial performance.Based on upper echelon theory,certain attributes of top managers such as(age,gender,education level and tenure)heterogeneity are hypothesized to have an impact on strategic CSR disclosure decisions and financial performance.In addition,considering CSR disclosure as a strategy,we integrate the upper-echelons perspective with the attentionbased view to examine the role of attentional orientation of top executives'(Chairman and CEO)in order to standardize the behavior of corporate social responsibility disclosure goals,and to provide evidences and suggestions for the construction of scientific top management team to strengthen enterprise.This research also examines the extent of corporate social responsibility(CSR)disclosures made by Nepalese banks in their annual reports based on Global Reporting Initiatives(GRI)G4 guidelines.The study made use of data generated from annual reports and accounts of the sampled firms and the Nepal Stock Exchange.In this research,we use the SPSS 22 to test the hypotheses.The results showed that: First,TMT heterogeneity have an important impact on the corporate social responsibility disclosure.Among them age heterogeneity,education level heterogeneity and tenure heterogeneity can promote corporate social responsibility behavior.Whereas the gender heterogeneity had no significant effect on the corporate social responsibility disclosure.Second,TMT heterogeneity and CSR disclosure had a significant positive effect on the bank's financial performance.At the same time,corporate social responsibility disclosure plays an intermediary role between TMT heterogeneity and financial performance.Third,we further examine the influence of top executives'(chairman and CEO)attention based on attention-based view theory and the results revealed that TMT heterogeneity are more tend to improve and ensure corporate social responsibility disclosures,TMT heterogeneity and corporate social responsibility disclosures are more likely to enhance financial performance when CEO focus their attention more on CSR disclosures.Whereas the impact of chairman's attention on the relationship between the TMT heterogeneity,corporate social responsibility disclosures and financial performance are ambiguous.The descriptive analysis exposes that irrespective to sector,the overall trend to disclose CSR activities in listed banks of Nepal is on increasing side from year to year.This study not only enriches the upper echelons theory,which contributes to our understanding about how TMT heterogeneity affects financial performance through strategic CSR disclosure but also provide a convincing justification for top managers to encourage corporate social responsibility disclosures,guide enterprises to actively fulfill their social responsibility to promote the harmonious development of economy,society and ecology.It has important theoretical and practical significance.This study also gives us new evidence to explore the link between TMT heterogeneity,CSR disclosure and firm financial performance in emerging market.