Resumo

Human rights can be defined as the inalienable fundamental rights that an individual is inherently entitled to simply by virtue of the fact that he or she is a human person, regardless of nationality, sex, place of residence, or ethnic origin, religion, color, idiom, or any other status (Giuliani, 2016), and are based on the principles of equality, dignity, and mutual respect (Song & Soliman, 2019). Thus, human rights are derived from the inherent dignity of the human person (Buhmann et al., 2019).

This paper seeks to answer the research question: To what extent do board components influence human rights disclosure?

Theoretically, the effect of board components on human rights disclosure can be explained by agency and stakeholder theory. According to agency theory, an agency relationship is a contract in which the principal hires the agent to perform a service on his behalf (Jensen & Meckling, 1976). Stakeholders are individuals or groups of individuals who affect or are affected by the organization (Freeman, 1984) and stakeholder theory developed from the value creation process and observations of the business context and is used in the study of firms (Freeman et al., 2020).

To test the hypotheses, we use a sample consisting of 1964 firms-year observation of 302 firms from Argentina, Brazil, Chile, Colombia, Mexico, and Peru between 2010 and 2020. The sample is composed of countries belonging to the Morgan Stanley Capital International (MSCI) Emerging Markets Latin America Index, created in 1990, which represents medium and large capitalization in six Latin American Emerging Market countries (Argentina, Brazil, Chile, Colombia, Mexico, and Peru) (MSCI, 2021). We used Feasible Generalized Least Squares (FGLS).

The results indicate that board independence, board specific skills and board size positively influence the dissemination of human rights. The results also demonstrate that gender diversity and CEO duality do not influence human rights disclosure. Finally, the results indicate that leverage and firm size positively influence the disclosure of human rights.

Theoretically, we conclude that companies with more independent directors, directors with specific skills, and more directors reduce agency conflicts by better monitoring managers and thereby increasing human rights disclosure, supporting agency theory. These companies should also have better communication with their stakeholders, meeting their needs. The results can also assist researchers to future research of board components and human rights disclosure from agency and stakeholder theory.

Islam, M. A., Deegan, C., & Haque, S. (2021). Corporate human rights performance and moral power: A study of retail MNCs’ supply chains in Bangladesh. Critical Perspectives on Accounting, 74, 102163 May, R. A. (2013). Human Rights in Latin America. https://www.oxfordbibliographies.com/view/document/obo-9780199766581/obo9780199766581-0146.xm