The influence of board composition on environmental, social and governance (ESG) disclosure of Thai listed companies

The study aimed to (1) investigate the extent, level and pattern of environmental, social and governance (ESG) disclosure in annual report of listed companies in the Stock Exchange of Thailand (SET), (2) to examine the different level of ESG disclosure between groups of interest in terms of board composition and corporate characteristic, and (3) to test the influence of board composition on ESG disclosure of Thai listed companies. Population was all listed companies in the SET. Using annual reports during 2015–2019, content analysis by word counting was used to quantify the extent, level and pattern of ESG disclosure, while board composition was measured by board size, board meeting, female board committee, audit committee, nomination committee, compensation committee, CSR committee, remuneration, CEO compensation, and board compensation. Descriptive analysis, independent sample t test, correlation matrix, and multiple regression were used to analyze the data of this study. The most common ESG disclosure was governance information disclosure following by social and environmental information disclosures. There was an increase of ESG disclosure in annual reporting during 2015–2019 by listed companies in the SET. Moreover, there was a significantly different level of ESG disclosure between groups of audit committee, nomination committee, compensation committee, CSR committee, and firm size. Finally, there was a significantly positive influence of board size, female board, compensation committee, CSR committee, and remuneration on ESG disclosure, while there was a negative influence of audit committee and CEO compensation on ESG disclosure. Finding of possible influence of board composition on ESG disclosure can demonstrate that agency theory can be used to explain the reason of ESG disclosure by Thai listed companies, although the disclosure is still voluntary reporting in Thailand.