Overview Of The Mauritian Economy Accounting Essay

To research the province of CSR describing in one-year studies of the Mauritian listed companies and to happen out whether it has a relationship with CG attributes board size, board composing, audit commission composing, CEO dichotomy, ownership construction, managerial ownership, industry and house size.Methodology: Contented analysis is used to pull out CSR coverage and CG information from the latest one-year studies of the 47 sample houses ( indiscriminately selected from the population of 93 ) . CSR related information is measured both in footings of words disclosed and score. A revelation checklist is prepared edifice on anterior researches and a CSR mark is assigned to each house based on their CSR information that match the checklist. Spearman correlativity and simple arrested development are used to prove the hypotheses and analyze the degree of CSR describing in one-year studies.

Findingss: Board size, board composing, managerial ownership and steadfast size proved to be related to CSR coverage. Board size and house size are the most important factors positively act uponing CSR coverage. CSR coverage is rather low in the Mauritanian listed companies-covering merely 38 % of the revelation checklist. Besides, Mauritian listed companies make few revelations on energy subject.Decision: This paper serves as a utile tool in proposing ways in which the degree of CSR coverage of the Mauritian listed companies can be improved.

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Originality: This paper is alone in its type in analyzing the relationship between CSR coverage and CG attributes in Mauritian listed companies.Keywords: CSR coverage, CG, Mauritian listed companies.



With the lifting intuition about the societal and environmental deductions of concerns, wage and employment dirts, sustainability and clime alteration issues mounting high on corporate dockets, harm of consumer assurance and trust in concerns with the fiscal crisis, coupled with the addition in international involvement in non-financial information from assorted stakeholders ; the construct of CSR is turning in importance than of all time before. Companies have understood that CSR engagement is no more a charitable action but, it opens the door for future chances and competitory advantage.CSR has now become the manner frontward for concern success- by supplying corporate scheme and way for daily operation. Phases used in the study of the World Business Council for Sustainable Development on Corporate Social Responsibility such as ‘business benefit ‘ , ‘control hazards ‘ , ‘improving repute ‘ , ‘identify market chances ‘ and ‘maintaining public support ‘ give a clear position of the of import topographic point that CSR plays in companiesThe construct of CSR is non a new one ; it dates back to the eightiess. The proliferation of CSR construct has given manner for a alteration in the traditional business communities positions of net income maximization as was pointed out by Friedman ( 1970 ) , that the exclusive societal duty of companies is to maximize net income.

Companies are now cognizant of the wider purpose of societal duty which is to continuously better the quality of life while at the same clip safeguarding the profitableness of the corporation for its stakeholders. Companies now use a overplus of studies for CSR reporting- CSR study, CG study, Sustainability study being the chief 1s.Mauritius being no exclusion, CSR plays an of import topographic point. It has a statutory position for CSR which is embodied in the Income Tax Act 1995 which requires all profitable onshore Mauritanian companies to apportion 2 % of their indictable income to the CSR fund for authorities based activities to contend against poorness ( Finance Act, 2009 modified in January 2012 ) . Besides, CSR disclosures in Mauritius are guided by the CCGM which is compulsory for all PIEs ( which includes listed companies ) . Therefore, under subdivision 7 of the codification they have to describe on the undermentioned issues: environment, moralss, Health & A ; safety and societal.

These are the lone guidelines on CSR coverage in Mauritius. Nothing is said as to what necessitate to be disclosed under each subdivision.longitudinal survey of CSR revelation in Mauritius outlined an betterment in the degree and content of CSD after the debut of the CCGM. This indicates that CSR coverage in Mauritius is extremely linked to CG. Based on this, this paper purports to happen the relationship between CSR coverage of the Mauritian listed companies and each of the property of CG – board size, board composing and audit commission composing to call few. Furthermore, in the absence of clear guidelines on CSR coverage in Mauritius, an scrutiny of the province of CSR coverage of the listed companies is made in order to happen agencies in which CSR coverage of Mauritian listed companies can be improved.The balance of the paper is arranged as follows:Chapter 2- gives the reader an overview on CSR and CG in MauritiusChapter 3- reappraisals prior relevant literature on CG and CSR in order to develop the research hypothesesChapter 4- explains the sample choice and aggregation of secondary informationsChapter 5-the findings of the research is outlinedChapter 6-concludes the research with recommendation and range for the hereafter.While anterior researches on CSR coverage in Mauritius have attempted to research the content and motivation for CSR coverage, this survey addresses a new and alone field that is, the relationship between CSR coverage and CG attributes.

Therefore, the paper is able to place new agencies of bettering CSR coverage of Mauritian listed companies.

Overview of CSR and CG in Mauritius

This chapter gives an penetration on the Mauritanian economic system before traveling to the province of CG and CSR patterns of the island.Overview of the Mauritanian economic systemMauritius, an Indian Ocean Island state with a diversified population, presents itself as an economic success narrative. On a GDP per capita footing, it is ranked 5th in Africa and the WB and IMF study on “ Making concern 2010 ” , ranked Mauritius 17th worldwide and the best state in Africa for making concern ( WB/IMF, 2010 ) . Many factors contribute to its success out of which the good administration system and the societal witting companies of the state are major 1s.Overview of CSR in MauritiusIncentives to prosecute in CSR activities in Mauritanian companies have a long manner back up to some 20 old ages ( ) . Harmonizing to Deloitte et Al. ( 2008 ) , battle in CSR in corporate Mauritius has started at different point in clip for the surveyed companies.

Local houses from assorted sectors engage in CSR undertakings. The MCB, Barclays bank, HSBC, Ciel Ltd, Airports of Mauritius and Beachcomber group are the names of few companies which make an of import part in CSR programmes in the island for ages to day of the month (An scrutiny of one-year studies of the Mauritian listed companies from 2004 ( that is, merely after the acceptance of the CCGM ) to 2007 revealed that the degree of corporate societal revelations have increased over the old ages This implies that corporate administration is linked to CSR in Mauritius as in other states.Overview of the Mauritanian Corporate Governance systemWith the rise in local concerns on corporate answerability and transparence following instances of corporate fraud of high profile companies such as MCB, Rogers group and Air Mauritius, coupled with the demand to stabilise the Mauritanian fiscal architecture in order to ease the acceptance of the WB and IMF international criterions and codifications initiative for emerging economic systems ; a commission of corporate administration was formed in 2001 which, adopted a codification of best pattern on Corporate Governance for Mauritius in October 2003.

In 2005, a NCCG was set up as the responsible organic structure of corporate administration in Mauritius.The CCGM draws its rules from the OECD rules of good administration and the male monarch ‘s study with stakeholder involvements as the drive force. The codification is voluntary but for Bankss and investing dealers/advisors conformity is compulsory under the Banking Act 2004 and Securities Act 2005 ; and in 2009 the FRA 2004 was amended now necessitating all PIEs to follow the codification on a comply or explain footing.

Therefore, it is now compulsory for the PIEs.Furthermore, in 2012 the Economic & A ; Financial steps ( Miscellaneous commissariats ) Act amended the FRA 2004. Under the amendments, every PIE shall now hold a statement of conformity with the codification of corporate administration in their one-year study and where there is no conformity ; the statement shall stipulate the ground for non-compliance. Besides, the external hearer has a responsibility to supply confidence on the statement of conformity of the PIEs with the CCGM.

All these commissariats help to better transparence which in bend instills assurance in the users of histories.LITERATURE REVIEWThis chapter gives the reader an overview on the literature and research on Corporate Social Responsibility ( CSR ) and Corporate Governance ( CG ) . The literature reappraisal is presented in two chief subdivisions.

The first subdivision traces the roots and nowadayss an overview on the construct and theories of CSR and CG. In the 2nd subdivision a reappraisal on the past surveies on the relationship between CSR and CG attributes is made and hypotheses are developed for the Mauritanian context.

Concepts and theories of CSR

Historical development of CSRThe beginning of CSR can be traced back to the 20th century in the United States of America. Carroll ‘s pyramid of CSR can function to explicate the historical development of CSR. At the base rests the economic class upon which builds the legal, ethical and beneficent classs ( Carroll, 1991, pp. 42 ) .

CSR has evolved as a consequence of the push of industrialization, followed by assorted societal & A ; environmental statute laws and a rise for societal justness and equity.Presents, with the addition in public consciousness on environmental and sustainability issues ; CSR has found a new field of opening. With the proliferation of CSR and amplification of theories ; it is now that CSR plays its core function such that more and more companies are doing voluntary corporate societal revelations.Definition of CSRBasically, the thought of CSR is the manner concern is operated whereby administrations have a responsibility towards the community at big. The concern for CSR is explained by the fact that a company make non run in isolation.

Rather, it is dependent on major histrions of the society- the environment, clients, and providers to call few. Therefore, if concerns want to guarantee their endurance in the long-run, they should see the involvement of the wider society above their ain involvement The first definition of CSR was given by Bowen ( 1953 ) as Carroll ( 1999, pp. 270 ) termed him as the male parent of CSR and who argued that business communities should move in the best involvement of the society as a whole.

Bowen ‘s general statement is that a concern is an instrument of society therefore, it must see societal involvement.Afterwards, many definitions of CSR made their manner. Davis ( 1960, pp.

70 ) , put forward that CSR is business communities ‘s picks and Acts of the Apostless that go far in front the house ‘s ain consecutive involvement. In the same line, McComb ( 2002, pp.5 ) posited that, CSR is associating concern operation with employee dealingss, ethical values, transparence, conformance with legal demands and respect for the society as a whole. Therefore, it can be said that CSR is the committedness of business communities towards the society through their corporate policies and actions.

In a simpler definition Eilbert and Parket ( 1973, pp.7 ) argued that CSR means “ the committedness of administrations to play an active function in the solution of wide societal jobs ” .McWilliams and Siegel ( 2001, pp.117 ) , termed CSR as actions that seem to further some societal good afar the concerns of the house and that which is imposed by jurisprudence.

From this, it follows that “ societal duty starts where the jurisprudence ends ” ( Davis, 1973, pp.313 ) such that, CSR activities of houses should travel beyond the jurisprudence and exceed their minimal duties.A modern-day definition of CSR includes the Triple Bottom Line construct which the EU Greenbook defined in the words to unite societal and environmental concerns while set abouting concern activities in inter-relation with the assorted stakeholders ( such as stockholders, clients, employees, force per unit area groups, communities, etc ) on a voluntary footing ( European Commission, 2001, pp.8 ) . That is, companies should take at unifying economic prosperity with societal part and environmental unity as it is the manner forward for sustainable endurance. The term CSR is besides connected with the construct of sustainability which the UN study Our Common Future termed as “ run intoing the demands of the present without compromising the ability of future coevalss to run into their ain demands ” ( Brundtland, 1987 ) .Today, CSR is no Panacea but, it is an umbrella that encompasses political, ethical, societal, environmental, economical and cultural factors therefore, steering administrations towards success.

CSR coverage is the procedure of pass oning to the populace the company ‘s interaction with the environment, the community, its employees, its clients and the scarce resources while set abouting its activities. It provides a balance with the fiscal informations in such a manner that it helps determine the overall public presentation of a company.Theoretical principle behind CSROver the old ages, several theories have developed to explicate the grounds behind CSR coverage, which the most common are: societal contract theory, legitimacy theory, stakeholder theory.

Social contract Theory

Gray, Owen and Adams ( 1996, pp. 13 ) described society as a ‘social contract ‘ between the members which make a society and the society itself. The societal contract theory emerged from the thought that the minute a company is incorporated, a societal individual is born which owes its being to society ( Younkins, 1948 ) and a societal contact is established which entrails societal interaction.

This contract necessitates a status which is best for all people. Under the societal contract theory, a company gets a licence to run in the society and those who fail to favor this societal contract lose the licence and the right to utilize natural resources, employ workers which threatens their sustainable development ( Deegan and Rankin, 1996, pp.54 ) .

Legitimacy Theory

Another theory closely related to the societal contract theory which is utile to explicate the relevancy of CSR is the legitimacy theory.

Suchman ( 1995, pp.574 ) , defined legitimacy as a generalized position that, “ the activities of an administration are pleasant, good, wanted and in line with the norms, beliefs and outlooks of the society ” . This theory is in fact an extension of the societal contract theory. From the contracts that companies have with the society, it flows that they have an duty to follow a socially responsible attack to run into society ‘s outlooks. Society can hence usage CSR battle to measure the legitimacy of an administration by sing how far they meet the societal norms and values ( Parsons, 1956 ) thereby, constructing a positive image and safeguarding its endurance.

Stakeholder Theory

The stakeholder theory postulates that the success of a company depends on its ability to run into the demands of its assorted stakeholders. Taking Freeman ( 1984, pp.25 ) classical definition of a stakeholder “ any group or person who can impact or is affected by the accomplishment of an administration ‘s aims ” . Clearly, a company has assorted stakeholders which include: stockholders who invest their money in concerns ; employees invest their clip and rational capital ; clients invest their trust ; authorities and communities provide substructure and market and providers provide stock of natural ) . Therefore, it can be seen that stakeholders play an of import function of supplying supply of needed resources which are important to the day-to -day operation of an administration. As such, an administration needs to back up its ‘ stakeholders by following with their normsCorporate Governance and CSRAnother construct which is relevant to the issue is Corporate Governance. Before go oning with the analysis allow us foremost leap to the definition of and grounds behind Corporate Governance.

Corporate Governance patterns root back to the 18 century chiefly because of the principle-agent job in corporations. The basic job was that corporations were owned by stockholders but managed by direction therefore giving rise to a separation of ownership and control and the resulting bureau jobs. That is, direction were moving as an agent of the proprietor and given that they had the control of the concern in their custodies, they were concerned chiefly with their ain involvement. Therefore, they maximised their ain benefits instead than that of the proprietor.A system of corporate administration emerged as a consequence of this, under which the activities of direction are administered and controlled by the board to cut down bureau costs and guarantee that they are in line with the involvement of the absentee proprietors ( Harmonizing to the Cadbury study, CG is “ the system by which companies are directed and controlled ” ( Cadbury, 2000 ) . The function of CG is to better Torahs and ordinances upon which companies operate ; protect proprietors ‘ right ; equilibrate the involvements of all stakeholders and first promote moralss, transparence and equity in all minutess ( Page, 2005, pp.

2 ) .Assorted bookmans perceive the construct of CG as two dimensional- the narrow and broader position of CG. What is of import for this survey is the broader position of CG which is concerned with an entity ‘s duty towards the assorted stakeholders who straight or indirectly contribute to its success ( MacMillan et al. , 2004, pp. ) . This position is in line with the stakeholder theory of CSR. As such, it can be seen that CG and CSR are closely linked if non the same.

CG and CSR are related issue in that both accents on a house ‘s committedness to its stakeholders and contact with the society at big ( Jamali et al. , 2008, pp.446 ) . Besides, harmonizing to Jones and Thomas ( 1995 ) , CSR is a tool of CG which enables companies to run into their duties towards their employees, providers, clients and communities. CSR as a dimension of CG is farther illustrated through CG attributes which include board construction, stewardship, capital construction, strategic leading every bit good as societal duty.Another nexus which is of import is between the legitimacy theory of CSR and CG. Both are ingredients for making sustainable value which is important to the credence and endurance of an endeavor ( Van den Berghe and Louche, 2005 ) .

On the one manus, good administration rules bring together the involvements of all stakeholders ; heighten public assurance which in bend improve house competitory place and public presentation. Similarly, CSR brings a company near to its stakeholders thereby deriving public trust, attraction and long permanent benefits ( Jamali et al. , 2008, pp.446 ) .The links can be illustrated as follows:

Corporate Administration


Connection: both focal point on an entity ‘s committedness to its stakeholders.

Broader position of CG: an entity ‘s duty towards its assorted stakeholders ( MacMiller et al. , 2005 )

Stakeholder Theory: companies are made up of a web of stakeholders and have an duty towards them ( Freeman, 1984 )

CG rule: reconcile involvements of all stakeholders and better house fight

Connection: both hike a house ‘s relationship with its stakeholders to better public presentation.

Legitimacy Theory: companies exist because of the society as such they have a duty to run into society ‘s outlook with back wash long permanent benefits

Table 1: Link between CSR and CG

Hypothesiss Development

The fact that, there exists a connexion between CG and CSR, it is obvious that CG attributes such as board size, independent managers, ownership concentration to call few straight influence CSR activities and revelations as assorted surveies[ 1 ]have proved.

Based on empirical surveies, 8 hypotheses are developed. Six corporate administration variables are examined to happen if they have a correlativity with CSR revelations. Firm size and industry are besides included as variables.

Board Size

One of the fundamental of CG is board size which is straight related to the board ‘s effectivity. By and large, there is no recommended figure of board members though ; it is argued that a board should non be excessively little or excessively large.

While it is evidenced by assorted surveies ( that little boards alleviate bureau job between direction and proprietors ) found that big boards give rise to dissensions ensuing in less valuable communicating, direction and determination devising. More board members, nevertheless, gives rise to more fresh thoughts and more experiences which might in bend lead to better direction and communicating.In the Mauritanian context, the CCGM does non stipulate the figure of board members but, CSR activities autumn under the shoulder of the board.Thus, back uping researches that there exists a positive relationship between board size and CSR revelations in Malaysian GLCs & A ; public listed companies and in the absence of anterior research in the country in Mauritius, it is hypothesized that:H1. There exists a positive relationship between board size and CSR revelations in Mauritian listed companies.

Independent Directors

Traveling on to another of import mechanism of CG, the figure of managers on board who are independent from direction and dominant stockholders, and who safeguard the involvements of stockholders, is likely to act upon board success. In an effort to happen the difference between socially responsible houses & A ; non- socially responsible houses found that the difference lies in the board construction that is, the figure of independent managers which is larger in socially responsible houses. From this it flows that, the figure of independent managers on board is likely to act upon a house ‘s battle in CSR activities and revelations in that, the function of independent managers is to supervise the activities of direction and promote administrations image in the eyes of the populace. As such, any act of non prosecuting in CSR activities by direction with back wash consequence on a house ‘s repute is avoided with the presence of independent managers on boardTo add to it, farther surveies revealed that the presence of independent managers on board through their monitoring function, consequence non merely in more disclosure of corporate information but besides improved quality of revelationsIn Mauritius, the codification requires all companies to hold at least 2 independent managers on board. This demand is indispensable for the monitoring function and the protection of stockholders involvements. With no clear grounds on the relationship between CSR revelations and board construction in Mauritius, the hypothesis is as follows:H2. There is a positive relationship between the figure of independent manager on board and the degree of CSR revelation in Mauritian Listed companies.

Audit Committee

Audited account commissions have the function of reexamining companies ‘ procedures ; supervise the operation of the internal control systems and conformity with Torahs and ordinances and supplying confidence on the credibleness and dependability of fiscal information. Thus audit commission is straight related to fiscal coverage ( Wright, 1996 ) . Ho and wong ( 2001 ) and Bliss and Balachandran ( 2003 ) proved in their surveies that audit commission is positively related to the degree of voluntary revelations. Forker ( 1992 ) moved one measure further with his statement that an audit commission with a high per centum of independent managers should extenuate agent struggle of involvement and better internal control system that will lend towards better quality of revelations.

This statement was supported by Said et Al. ( 2009 ) research which documented a positive relationship between the proportion of independent managers in an audit commission and the extent of CSR revelations in Malayan public listed companies.In Mauritius, given that the CCGM recommends that the bulk of the audit commission be independent managers ) , it can be assumed that the same positive relationship will be in Mauritius. Therefore, it can be hypothesized that:H3. The figure of independent managers sitting in audit commission is positively related to the degree of CSR revelations in Mauritian listed companies.

CEO Duality

CEO dichotomy occurs when a individual individual acts both as the CEO and the president of the board of a company. A CEO-chairman dichotomy improves the monitoring procedure as the same individual who develops long term vision and schemes for a company, oversees the execution of these schemes by the direction which shape the manner frontward for gaining the long term vision ( Haniffa and Cooke, 2002 ) .

At the same clip, a Chief executive officer who is besides a board chair, vests excessively much power in a individual individual which allows the latter to take determinations in his/her ain involvements ( Jensen and Meckling, 1976 ) . It besides affects the effectivity of the board as the 1 on whose shoulder rests the duty of the board is more concerned with his/her personal involvements instead than the best involvement of the company. As such issues such as CSR activities and revelations will non pull the attending of the president.

In the CCGM, there is a demand that the rubric, function and map of the CEO be kept individually from that of the ChairpersonTherefore, CEO dichotomy is a dual edged blade which on the one manus, improves a steadfast monitoring procedure which might in bend enhance the quality of revelations and on the other manus, minimises stockholders value. From the above, it can be hypothesized that:H4. Mauritian listed companies which have CEO dichotomy are more likely to hold a low degree of CSR revelations.

Ownership Structure

Ownership construction varies from company to company and from state to state. In some companies, portion ownership is concentrated in the custodies of few big stockholders while in other companies it is diversified therefore, act uponing the coverage procedure ( Roberts, 1992 ) .Clearly, in a company directors who are involved in the daily running of the concern have more information than stockholders who are the proprietors therefore, giving rise to bureau cost.

This explains the principle behind corporate revelations which aim to cut down the divergency of information between the rule ( directors ) and the agent ( stockholders ) . As such, it is rather logical that in a company where there are many stockholders it is more likely that there will be more revelations of information than that where there are merely few stockholders. In a company with spread ownership, there is a high degree of information dissymmetry as more people are involved than that in a concentrated ownership hence, commanding more revelations.Furthermore, the divergency of information between stockholders and directors might force stockholders to oblige directors to unwrap more information therefore, botching the stockholder and director relationship ( Brammer and Pavelin, 2006 ) . Keim ( 1978a ) , went farther in his statement that the demands for information grow in size when the ownership of a company is less clustered.

In a concentrated ownership company, it is deemed that the degree of revelations will be lower as Revert ( 2009 ) put that, directors in concentrated ownership construction suffer from less force per unit area on the portion of portion proprietors and as such are less motivated to describe extra corporate information on their web sites as the few stockholders can obtain their information straight from the company.Prior surveies carried out on the relationship between ownership construction and CSR revelations is divided into two cantonments. While some surveies have evidenced the being of a positive correlativity between wider ownership and the degree of CSR revelations, others have indicated a negative relationship.The CCGM clearly points out that shareholding in Mauritius is concentrated in the custodies of few people. For our survey, nevertheless, given that the mark is the Mauritanian public listed companies, that is, companies which are listed on the stock exchange of Mauritius therefore, it can be assumed that shareholdings in Mauritanian public listed companies is spread given that anyone who wish can put in those public listed portions. The hypothesis is as follows:H5.

There is a positive relationship between wider shareholding and the degree of CSR revelations in Mauritanian public listed companies.

Managerial ownership

The chief ground behind the principal-agent job is that companies which are owned by stockholders are run by directors who have small or no involvement in the company as such, the directors tend to keep their ain involvement as precedence instead than doing maximizing stockholders wealth. Anterior researches ( Coffey and Wang, 1998 ; Mohd Nasir and Abdullah, 2004 ) have proved that an addition in the sum of equity held by directors in an administration reduces the principle-agent struggle of involvement and enhance directors ‘ motive to do more coverage. When managerial ownership additions, both directors and stockholders become on the same line of equality and start to portion the same values. Just like stockholders wish to put in socially responsible companies, when directors become stockholders they besides portion the same position therefore, heightening a house ‘s battle in CSR activities and coverage.

surveies nevertheless, portrayed a negative relationship between managerial ownership and the degree of CSR revelations. Guan found that managerial ownership of above 45 % lead to low degree of CSR revelations in the Malayan public listed companies.A more recent research nevertheless, rejected the negative relationship. It showed that the figure of portions held by executives has a positive association with CSR revelations in the Malaysian listed companies.

Therefore, in visible radiation on this latest research on the connexion between direction ownership and CSR disclosures ; it can be hypothesised that:H6. There is a positive relationship between the per centums of stocks owned by executive managers and CSR revelations in Mauritius listed companies.

Firm Size

Assorted theories have an statement for a size-CSR revelations relationship.

As a affair of fact, big companies engage themselves in a batch of activities and can be expected to do more revelations than little 1s which help to legalize their actions and guarantee their long-run endurance ( Mohd Ghazali, 2007 ) .Harmonizing to the stakeholder theory, societal revelations act as a answer to calls from a house ‘s external environment. Thus, given that big houses have a pool of stakeholders, they are more open to the general populace ( ) and therefore, face greater force per unit areas under the stakeholder theory to move in a socially responsible mode and to do societal revelations non merely to investors but the assorted stakeholders involved This is evidenced by Guthrie and Parker study on the differences in societal revelation in the United Kingdom, United State and Australia which concluded that, the bulk of revelations are the direct consequence of force per unit area from the populace and larger companies are the more touched ( Guthrie and Parker, 1990 ) .This is farther supported by the bureau theory. Cowen et Al. ( 1987 ) argued that larger entities have more stockholders who might pay attending to the societal engagement of the company and they might unwrap societal information through one-year studies because of the higher bureau cost.In add-on, Watts and Zimmerman ( 1986 ) in his political theory put frontward that larger companies are more seeable in the eyes of the populace and in the same manner provide more corporate information.

A huge bulk of empirical surveies carried out around the Earth supported a positive relationship between house size and societal revelation with the exclusion of few 1s. Belkaoui and Karpik ( 1989 ) research was different from the others in that it documented a positive relationship between house size and the content of CSR revelations.Base on the majority of findings on the positive correlativity between CSR revelation and house size, the few exclusions portraying a negative relationship are nil. Furthermore, a recent KPMG international Corporate Responsibility describing study strengthened the common belief that “ bigger companies are better at CR describing ” ( KPMG, 2011 ) . The study used gross as the measuring of house size and portrayed that as the gross of companies gain in impulse, the degree of CR coverage besides followed the form such that it concluded that “ larger companies are leaders in Corporate Responsibility coverage ” ( KPMG, 2011, pp.11 ) . From the above, it can be hypothesised that:H7.

Firm size and the degree of CSR revelations of Mauritian listed companies are positively related.


The nature of industry is considered to be another of import factor as argued that the engagement in diverse types of voluntary revelations differ across industries. Basically, some companies because of their activities and the industry to which they belong are bound to do more revelations in response to force per unit areas from the external environment. Writers such as Dierkes and Preston ( 1977 ) and Gray et Al. ( 2001 ) asserted that companies in environmental sensitive industries like the extracting industry, are more prone to unwrap more information than those in other industries. This is explained by the fact that these companies face a batch of societal force per unit areas as a consequence, they have to do revelations to construct public trust.

To add to it, proved that apart from companies of environmental sensitive industries ; consumer oriented companies are besides expected to be more active in societal revelation that other companies since, the powerful consumers can act upon gross which can in bend drama on their long-run endurance.The above literature is supported by the findings of assorted surveies which have evidenced the being of an industry-disclosure relationship. Furthermore, KPMG ( 2011, pp.

13 ) reported a higher duty to CSR coverage among those industries which impact on the society and environment with the highest CSR evaluation in energy and natural resources industry, followed by ICT, nutrient & A ; beverges, pharmaceutical and building industries.Base on the consequences of anterior surveies, it can be hypothesised that:H8. The environmentally sensitive industries in Mauritius unwrap more CSR information than other industries.

Research Methodology

Aims of the surveyThe basic purpose of this research is to:Test the assorted hypotheses developed in the literature reappraisal chapter in order to happen out whether there is a relationship between CSR revelations and CG attributes in Mauritian listed companiesDerive an penetration on the degree of CSR revelations in Mauritian listed companiesBeginning of informationsFor the intent of this survey secondary informations which are already available on the one-year studies of Mauritanian listed companies are used. CSR disclosures in one-year study are the most common signifier of unwraping as evidenced by Adam et Al. ( 1998 ) . Based on these findings and the justification of Kent and Chan ( 2003 ) on the usage of one-year study, this survey focuses on one-year study as the chief beginning of CSR coverage in Mauritanian companies. The information obtained are bespoke to run into the aims of the survey.

This method has the advantage of cost and clip nest eggs ( Boyd, 1994 ) and avoids all chance of both non-response and response mistake associated with primary informations.Data aggregation designConstructing on old societal duty revelation surveies, a content analysis of the one-year studies of the listed companies is carried out. It is “ a technique for doing illations by objectively and consistently placing specified features of messages ” ) . This method is a crystalline research signifier and is utile in covering with big volumes of informations.However, it is criticised on dependability and cogency evidences.Reliability is concerned with the consistence and stableness of steps ( Bryman and Bell, 2007 ) .

This review does non straight use to the research as our chief concern is on publically available information from one-year studies of companies. Given these are prepared by direction, who report on the activities of the company ; it can be assumed that the information reported are dependable. For case, it is non likely that direction will describe a peculiar board size in the one-year study for a fiscal twelvemonth so describe another board size for the same fiscal twelvemonth as this will imply incompatibility of informations and breach of direction responsibility of due attention and diligence implicit in legal actions. To add to it, the enfranchisement and confidence from external hearers on the corporate administration studies of companies ( under Section 39 ( 3 ) of amended FR Act 2004 ) , from where most of the informations are collected ; supports the rightness and dependability of the secondary informations used in the research.

Further, one-year studies of companies for a peculiar fiscal period are issued merely one time. That is, for one fiscal twelvemonth a company will non publish two one-year studies such that dependability can be tested. Besides, instances of rectification of the content of one-year studies are really dull.

Cogency on the other manus, has to make with “ whether or non a step of a construct truly measures the construct ” ( Bryman and Bell, 2007 ) . To provide for this, multiple indexs are used and their relation to the research inquiries indicates that both cogency and dependability are precedences of the survey.Data is collected through the cyberspace, utilizing information from one-year studies available on company web sites. The latest available studies are considered irrespective of fiscal twelvemonth as clip period does act upon the research.

The bulk of the one-year studies ended on December 2011 and June 2012. Annual studies for December 2012 which were available in March 2013 are non considered because of the clip graduated table of the survey. CSR disclosures from all parts of one-year studies are considered. For group entities, the CSR coverage of the group are considered. All currencies are converted into Rupees ( MUR ) utilizing the mean exchange rate used by the several company.Sampling Unit of measurementTarget population: Mauritanian Listed companies ( both on official Market & A ; DEM )Sample: 61 of the Mauritian listed companiesThe chief ground for aiming the listed companies is that though the codification of corporate administration is compulsory for Bankss for old ages ; listed companies are besides bound by the amendment of the FRA 2004 made in 2009 to follow the CCGM which outlines under Section 7 that they should describe on ethical, environmental, Health & A ; Safety and societal issues that is, there CSR activities ( Corporate Governance, 2004, pp. 112 ) .

Sampling sizeThe 93 staying listed companies are categorized by industry: Transport, storage communicating ; touristry and leisure ; banking, insurance and other finance ; investing ; trade ; building & A ; edifice stuffs ; agribusiness ; fabrication and pharmaceuticals. From the sum of 93 companies, a sample of 47 companies is drawn under the graded random trying technique. Harmonizing to Saunders et Al. ( 2007, pp.221 ) , it is the technique of interrupting up a whole population into sub groups known as “ strata ” and constructing single sample from each “ stratum ” .The mark population is divided into different industries from where samples are drawn utilizing simple random sampling. The sampling process is depicted below:Table 2: sampling processMeasurement of variablesEach company ‘s one-year study is analysed and findings are input on an single Excel entering sheet.

Dependent variables

The dependant variable, CSR disclosures is measured utilizing two indicators- word count and CSR revelation per subject.Word CountIn the first case, the figure of words is used to mensurate the extent of revelation. This method is utile as Gray et al.

, argued that “ words lend themselves to more sole analysis ” ( Gray et al. , 1995b ) . It is more in deepness unlike other measurings such as part-page revelation and figure of sentences which disregard differences in character and page sizes ( Hackston and Milne, 1996 ; Milne and Adler, 1999 ) . Plausible as it may be, word count is non necessary a dependable measuring as like the other measurings, it ignores the duplicate of words to show the same message.

To add to it, for really many companies, CSR disclosures consist of narrating narratives which increases their CSR words unnecessarily.CSR revelation per subjectTo get the better of this, a CSR marking system is used as a 2nd measuring of CSR revelations. Based on the past instruments used by in their surveies to mensurate the degree of CSR revelations per subject ; a revelation checklist with five subjects ( Appendix 1 ) embracing the demands of the Mauritanian Code of Corporate Governance is developed for the research. Subjects are categorized as: environment, energy, community engagement, employees and others. The checklist is applied on the one-year studies of selected companies to mensurate the degree of CSR revelations.

Under this method, a point is awarded for each CSR programme disclosed in the one-year studies of companies refering any class contained in the revelation checklist. If a revelation is addressed in more than one topographic point in the one-year study, a individual point is assigned to the revelation therefore, extinguishing duplicate mistakes and giving a better image of a company ‘s CSR revelations.The maximal CSR mark for each subject considered is 10 for both environment and employees, 9 for community engagement, 6 for energy and 2 for others. CSR revelation mark under each subject are cumulated to cipher the entire CSR mark ( Maximum mark of 37 ) .

Independent variable

Board size- is measured by the figure of members on board.Independent directors-refer to those managers who have been conspicuously termed as independent managers in the one-year studies of listed companies. They are measured by the ratio of independent managers to entire figure of managers on board.Audit committee- the per centum of independent managers to entire managers sitting on the audit commission is used.

CEO duality- is measured utilizing a dichotomous variable where “ 1 ” means that the CEO is besides the president of the board and “ 0 ” otherwise.Ownership structure-is measured by per centum of portions held by the 10 largest stockholders to the entire figure of portions issued. Where the 10 largest stockholders owned above 50 % of the shareholding, it is considered as concentrated. A dichotomous variable is used for entering where variable 1= concentrated ownership and 0= spread ownership.

Managerial Ownership- is measured by the per centum of stocks held by executive managers to the entire figure of stock issued.Firm size- assorted surveies have measured company size otherwise. While some ( Watson et al. , 2002 ; Tagesson et al. , 2009 ) have used the figure of employees, others have preferred the entire assets, gross or even market capitalisation. For this research three steps of size are used: Gross, entire assets and market capitalisation.Industry- is classified as follows: Conveyance, storage communicating ; touristry and leisure ; banking, insurance and other finance ; belongings development ; investing ; trade ; building & A ; edifice stuffs ; agribusiness ; fabrication and pharmaceuticals.Statistical TrialsStatistical Package for Social Sciences ( SPSS ) 17 and Excel are used to analyze the information collected.

To prove the hypotheses developed, a simple curve appraisal arrested development and correlativity trials are used. These trials as used in old surveies ( Cooke, 1989b ; Gray et at. , 1995 ) mensurating societal revelations are appropriate for mensurating the relation between qualitative variables ( Agresti and Finlay, 1987 ) .

Analysis and Findingss

Figure 3: sample

Figure 4: Sample Distribution

CSR revelation in MauritiusIt is of import to observe that the standard divergence for CSR word is low which implies that about all companies in the sample make the comparatively the same sum of CSR revelation in footings of words. The standard divergence for entire mark nevertheless, is relatively high. This entrails that although all the companies on mean unwrap around 1088 words on their CSR activities, they differ in the figure of CSR programmes that they undertake.

That is, some companies 1088 CSR words cover 14 CSR programmes while for others it is good above or below this. This proves that CSR word as a step of CSR revelation is non a good medium as it does non mensurate in existent footings. It besides helps to explicate why CSR mark is given a precedence over CSR word in the research as a step of CSR revelation.

It can be said to some extent that the Mauritian listed companies abide to regulations and Torahs imposed as evidenced by the fact that no company from the sample did experient CEO dichotomy as clearly put in the CCGM

Figure 6: CSR revelation by subject

Figure 5 illustrates the CSR programmes embracing 5 subjects which are disclosed in the one-year studies of the 47 listed companies. The community subject which covers societal activities such as EAP, charitable contributions to call few, is ranked first in footings of CSR revelation with a mark of 222, followed by environment and employee subjects. This is farther supported by Table 5 above, where the mean for community revelation of 2.86 ( 5 ) is highest from the mean of the other subjects.Within the community subject, CSR disclosures related to the public assistance of vulnerable kids, EAP, charitable contributions to NGO ‘s, instruction of disable kids were the most common.

The first two classs that is, the public assistance of vulnerable kids and EAP form portion of the 3 precedences of the CSR Fund set by the Government in 2010 ‘s budget. This once more supports the above say that Mauritanian house abide by regulative regulations and ordinances. Further, it shows that with clear guidelines on CSR activities from the Government, companies are in a better place to invent their CSR fund which in bend helps to outdo satisfy community public assistance.It is surprising to observe that, despite the chief focal point on green energy in line with the undertaking ‘Maurice Ile Durable ‘ and the assorted inducements taken by the Mauritanian Government to promote local companies to bring forth their ain energy and to do efficient usage, CSR revelation under energy subject is still really low among Mauritanian listed companies. The Table of frequence in Appendix 4 shows that energy subject is highest in zero mark ( 40 % ) . Out of 47 companies, 19 companies made zero revelation and out of the staying 60 % , 23 companies make between one to three revelation ( s ) and the remainder make between four to six revelations under energy subject. This shows that CSR revelation under energy subject is still at the introductory stage with a mean of 1.

70 ( 1 ) as shown in table 1 and with more regulative guidelines this will turn over clip.An analysis of the province of CSR revelation of the sample houses revealed that, for the bulk CSR revelation is non nonsubjective since merely the positive actions are disclosed. Merely two companies made a relative coverage of both the positive and negative actions.Apart from the deficiency of objectiveness, an analysis of the CSR revelation in one-year studies of houses revealed that merely like the Mauritanian populace sector ( OPSG, 2011, pp86 ) ; the Mauritian listed companies do non hold a specific model for CSR coverage. Each company discloses what he thinks right and of import therefore, giving a plausible account for the differences in CSR revelation in Mauritian listed companies.

Most of the companies make their CSR revelation in their Corporate Governance study with the exclusion of few which have a separate CSR study. Cases where companies did non do any CSR revelation in their one-year study are nil. This gives an indicant that with the amendment of FRA in 2009, doing the Mauritanian codification of Corporate Governance mandatary for Mauritian listed companies ; these companies are now active CSR citizens.An in-depth analysis of the one-year studies of the sample houses nevertheless, revealed that though all companies make CSR revelation, a little clump of companies ( 2 companies ) do non truly favor CSR ; they unwrap a few lines on CSR actions merely for the interest of coverage and to stay with the Mauritanian Code of Corporate Governance. This shows that some houses are still nescient on the demand and of import of CSR coverage.Hypothesis TestingIn order to prove the hypotheses developed in the literature chapter, SPSS computing machine based system and excel is used to analyze the information collected. In the first case, a cross tabular matter is carried out in order to expose the relationship and step the association between the dependant and independent variables.

Once it is known that there exists an association between the dependant ( CSR revelation ) and independent variables, Spearman correlativity trial is done to mensurate how variables are related. Finally, a simple arrested development is conducted to prove whether there is a prognostic relationship between the variables and to prove the hypotheses.Some of the informations collected are usually distributed nevertheless, given that the dependant variable that is, CSR word and CSR mark are non usually distributed as shown in Table 5.1 in Appendix 5, not parametric trial is used to prove the hypotheses.

H 1. Board size and CSR revelation

Tables 6.

1 and 6.2 in appendix 6, shows that little board size with 5 to 10 members are centered toward CSR revelation of around 100 to 2000 words and 1 to 15 in footings of mark. Large board sizes of 11 to 15 members on the other manus, are positioned towards larger CSR revelation both in footings of words and mark. Therefore, it is clear that big board size unwrap more CSR information both in footings of words and score than little board.Furthermore, the Fisher exact trial indicates that there is an association between board size and CSR revelation both in footings of words and mark. That is, board size as an independent variable does act upon CSR revelation.

Table 6.3 in appendix 6, gives an indicant of the strength of the association between the 2 variables. The relationship between board size and CSR word and CSR mark is important ( r= 0.

01 ) – spearman 2 tailed trial. The correlativity of 0.57 indicates that there is a strong positive relationship between board size and CSR revelation. That is, as board increases or decreases in size, CSR revelation follows the same tendency. To add to it, the correlativity sig value ( & lt ; 0.

05 ) gives an indicant that a alteration in the independent variable, that is, board size stimulates a important relevant alteration in CSR revelation both in footings of words and mark.Though there is a statistical important between the 2 variables, it is of import to observe nevertheless, that CSR revelation response rate is slower to that of board size. Simply to set, CSR revelation additions at a much slower rate than the addition in board size or frailty versa. This is depicted in Figure 6.4 in appendix 6, that when board size addition from 5 to 15 members ( 200 % ) , CSR revelation is likely to increase from 500 to around 1200 words ( a‰?140 % ) and from around 8 to 16 ( a‰?100 % ) in footings of mark.Therefore, the correlativity and arrested development O.K. hypothesis 1 that there exists a important and positive relationship between board size and CSR revelation.

This contradicts Jessen ( 1993 ) say that big board size consequences in less valuable communicating. In fact, big board means more people which is synonymous to more thoughts and better communicating.The determination is in line with Esa and Ghazali ( 2012 ) and Said et Al. ( 2009 ) researches in Malaya that there exists a positive relationship between board size and CSR revelation.

H2. Independent managers on board and CSR revelation

The cross tabular matter Table 7.

1 in appendix 7 indicates that, CSR revelation in footings of word does non vary harmonizing to the figure of independent managers on board. This is the instance as the figure of independent managers on board runing from 2 to 5 is found to unwrap around 100 to 3000 CSR words and the figure of independent managers on board above 5 every bit disclosed about 100 to 3000 CSR words with the exclusion of few 1s. The exclusion nevertheless, is non the norm. Furthermore, the chi- square cross tabular matter portrays that there is no association between independent managers and CSR word.

CSR revelation measured in footings of CSR mark nevertheless ; turn out to hold an association with the figure of independent managers on board. From Table 7.2 in appendix7, it can be seen boards with higher figure of independent managers have higher CSR mark with few outliners.

Excluding the few exclusions, boards composed of 2 to 5 independent managers have CSR mark between 6 to 20 while boards of more than 5 independent managers have CSR mark runing from 20 to 30. Therefore, board composing does act upon CSR mark as grounds by the chi-square CSR mark consequence. Given that CSR mark is a more dependable step of CSR revelation, it can hence be assumed base on the chi-square consequence of CSR mark, that the figure of independent manager on board does act upon CSR revelation.Base on the association between the figure of independent manager on board and CSR mark, the spearman correlativity ( r=0.2 ) in Table 7.3 shows a weak positive relationship between the two variables. This means that as the figure of independent managers increases on board, CSR revelation additions in footings of mark or frailty versa.

One of import thing to observe nevertheless, is that the relationship is merely a weak one and as supported by the correlativity sig value of 0.6 ( Sig & gt ; 0.05 ) which indicates that there is no statistical important correlativity between the two variables, a alteration in board composing causes merely a little undistinguished alteration in CSR mark.This is explained by the arrested development in Figure 7.4 in appendix 7, which depicts that CSR revelation grows at a decreasing rate as the figure of independent manager on board additions. Simply to set, as independent managers grow in size, CSR revelation besides increases in footings of mark but the rate of addition in the dependant variable is less important to the rate of addition in the independent variable.Though there exists a weak and undistinguished positive relationship between the figure of independent manager on board and CSR revelation, the relationship is still positive therefore accepting hypothesis 2. The correlativity and arrested development support weakly the literature that, the figure of independent manager positively influences a steadfast battle in CSR activities and revelations.

Consistent with Said et Al. ( 2009, pp.222 ) and Esa and Ghazali ( 2012, pp.229 ) findings, the research shows that merely like in Malaysia, the figure of independent manager on board in Mauritanian companies is positively related to CSR revelation. Therefore, a alteration in the board composing will do a little positive alteration in CSR revelation.

From this, it can be deduced that, the independent managers of Mauritanian companies partially play their function of moving in the best involvement of the companies by incorporating community engagement with their nucleus missions which in bend promote their public image. May be societal battle is non the nucleus concern of the independent managers.


Audit commission and CSR revelation

93 % the listed companies audit commissions ‘ are made up of 1 to 5 independent managers. It is wise to advert that if non all but most of the listed companies abide by the Mauritanian codification of corporate administration which recommends that the bulk of audit commission be independent managers. One show non remains soundless on the fact that 2 of the listed companies audit commissions ‘ did non hold the being of any independent manager. This raises inquiries because audit commission being one of the nucleus commissions of an administration which shoulders the duty of reexamining the overall operation of a company ; should non be composed of executive managers merely.The cross tabular matters in Tables 8.1 and 8.

2 in appendix 8 shows that audit commission composing does non act upon CSR revelation. Audit commissions composed of 5 independent managers and above brand discrepancy CSR revelation both in footings of words and mark. This is farther evidenced by the no association chi-square consequences and the correlativities in Table 8.3 in appendix 8 which indicates that there exists a negligible and even no relationship between audit commission composing and CSR word and mark.From the above it flows that, the Mauritian listed companies audit commissions ‘ composing do non lend towards improved internal control and revelations. Unlike in Malaysia, where said et Al. ( 2009 ) research documented a positive relationship between the proportion of independent managers in the audit commission and the extent of CSR revelations in public listed companies ; in Mauritius the quality of revelations of the listed companies do non depend on the audit commission.

Therefore, the findings reject hypothesis 3 and make non back up say that there exists a nexus between the composing of audit commission and the degree of revelations.

H4. CEO dichotomy and CSR revelation

One interesting point is that, all the Mauritian listed companies complied by the CEO dichotomy demand of the Mauritanian codification of corporate administration as no instances of a individual individual moving both as the CEO and the president of the board were experienced. Therefore, in the absence of CEO dichotomy, hypothesis 4 remains unproved. It can non be proved that there is an association between the two variables therefore accepting or rejecting the hypothesis.


Ownership construction and CSR revelation

87 % of the sample house has concentrated ownership where the 10 largest stockholders own more than 50 % of the entire portions issued and the staying companies have dispersed ownership. This discards the premise made in the literature chapter that listed companies whose portions are listed on the stock exchange is unfastened to the populace who wish to put and therefore is expected to hold many stockholders.Furthermore, the crosstabulations in appendix 9 provide sufficient grounds to accept the void hypothesis that there is no association between Mauritian listed companies ‘ ownership construction and their CSR revelation both in footings of words and mark. The correlativity in Table 9.3 in appendix 9, gives farther range to the void hypothesis.

In both instances, the correlativity is non important demoing no or even a negligible negative relationship between the variables therefore, rejecting hypothesis 5 and the assorted anterior surveies[ 2 ]which have documented an association between ownership construction and CSR revelation.Denying Keim ( 1978a ) and Revert ( 2009 ) thought, the findings point out that the ownership construction of the Mauritian listed companies ‘ do non supercharge their directors for CSR information demand therefore, act uponing the coverage procedure.

H6. Managerial ownership and CSR revelation

CSR mark being a better measuring of CSR revelation indicates in Table 10.2 in appendix 10 that, there is an association between managerial ownership and CSR revelation. Table 10.

3 in appendix 10 nevertheless ; uncover that the association is merely a weak 1. Managerial ownership is positively related to CSR revelation where r= 0.2. This means that, as the figure portions owned by directors additions in a company ; CSR revelation besides increases or frailty versa.However, one should non turn down the fact that the relationship is weak and as evidenced by the correlativity sig value of 0.17 which is good beyond the benchmark of 5 % ; there is no statistical important between the variables. That is, alterations in managerial ownership do non excite important alterations in CSR revelation as depicted by the Figure 10.

4 in appendix 10.Though the relationship is a weak one it still supports hypothesis 6 and researches as discussed in the literature chapter, in that a alteration in managerial ownership will do a less important positive alteration in CSR mark. This draws to the decision that an addition in managerial ownership in Mauritian listed companies partly drives directors to move in the best involvement of companies by heightening CSR battle and coverage and at the same clip stamp downing principle agent struggle of involvement.

H7. Firm size and CSR revelation

Firm size measured by all the 3 variables viz. , entire assets ; market capitalization and gross showed an association with CSR word as illustrated by Tables 11.1 to 11.3 in appendix 11.

It is a common determination that as entire assets, market capitalisation and gross of companies increase ; they tend to place themselves towards big set of CSR word. However, no association is found between house size measured by entire plus and market capitalization and CSR mark.However, given the fact that at least 1 of the 3 measuring of house size which is gross, showed an association between house size and CSR mark ; this is sufficient to back up that there is an association between house size and CSR revelation both in footings of CSR word and mark. Besides, Table 11.7 indicates that in both instances the correlativity is important though the relationship between entire assets, market capitalization and CSR mark is reasonably positive for each one.This does non count what is of import is that, there is a positive important relationship with all the variables. As shown by the arrested development in Figure 11.8, there is a general inclination that as house grows in size, CSR revelation besides follows the lifting tendency or frailty versa therefore back uping hypothesis 7 and Guthrie and Parker ( 1990 ) , Belkaoui and Karpik ( 1989 ) , KPMG ( 2011 ) researches.

It is of import to observe that though steadfast size is significantly related to CSR revelation, there is no association between house size and ownership construction of the Mauritian listed companies as shown in Table 11.9 in appendix 9. Therefore, big houses do non hold more stockholders than little 1s.

This goes against Cowen et Al. ( 1987 ) statement as discussed above in the literature chapter. The bureau theory does non assist to explicate th