At present, the “being responsible” image of a model enterprise frequently collapses, makes the stakeholders more highly concerned about social responsibilities increasingly. It brains the increasingly challenging task for the government on how to guide and supervise the performance of corporate social responsibilities effectively. Thus, it is urgent to explore a governance mechanism to identify corporate hypocrisy behaviors. As an important stakeholder of an enterprise, non-controlling large shareholders can intervene in corporate governance through the exit threat, an important force in supervising corporate social responsibility communication.
Based on the impression management theory, this study first analyzes the social responsibility reports of listed companies on Shenzhen and Shanghai stock exchanges from 2006 to 2019 by using Python, and then constructs corporate social responsibility communication indicators from the dimensions of words and deeds respectively. By doing so, we could effectively identify the “gap between words and deeds” in corporate social responsibility communication. Further, this study also applies a multiple regression model to test the impact of the non-controlling large shareholder′ exit threat to participation in social responsibility communication. Subsequently, instrumental variable test and PSM are utilized to test endogeneity. Finally, the study explores the governance mechanisms of non-controlling large shareholder′ exit threat to corporate social responsibility communication from the perspective of two types of agency costs, concurrent board secretary and information generation and investigates the heterogeneity of its governance effectiveness.
The results show that there is the “contradiction between words and deeds” in corporate social responsibility communication, and the non-controlling large shareholder′ exit threat inhibits the symbolic words of corporate social responsibility and promotes the substantive deeds. Using the mediating model, it is found that the non-controlling large shareholder′ exit threat could improve corporate social responsibility communication by reducing principal agent cost and improving the secretary of board of directors duality. While companies abided by GRI standards performs a concealment effect and weakens the non-controlling large shareholder′ governance effect. Additionally, the non-controlling large shareholder′ exit threat plays an active role in the governance of corporate social responsibility communication, regardless of whether the enterprises are “more words and deeds less” or “more deeds and words less”. Meanwhile, compared with non-manufacturing enterprises and enterprises that voluntarily disclose social responsibility reports, the non-controlling large shareholder′ exit threat has a stronger governance effect on corporate social responsibility communication in manufacturing enterprises and enterprises that forcibly disclose social responsibility reports.
From the perspective of exit threat, this study enriches the research on non-controlling large shareholders′ participation in corporate social responsibility governance. It provides a theoretical basis for guiding non-controlling large shareholders to play an active role in promoting the “unity of words and deeds” of corporate social responsibility, and has important implications for improving the disclosure supervision of corporate social responsibility reports.
