Resumo

Economic growth has put enormous pressure on the Earth’s water resources (Zhou et al., 2018). Due to this exponential water demand, it has been forecasted that water scarcity can significantly affect the sustainable development of human society shortly (Zeng & Chen, 2019). To overcome this scenario, the United Nations' Sustainable Development Goals (SDGs) provide an ambitious set of targets for improving environmental sustainability, economic development, social cohesion, and human development by 2030 (UN Water, 2023).

Previous studies have approached corporate water disclosure from corporate characteristics and Stakeholder Theory standpoints. However, research on corporate water disclosure still needs to be completed, and scholars have claimed further investigation. Thus, this research aims to examine the effect of board composition on corporate water disclosure.

Recently, scholars have argued that stakeholders are starting to pay attention to a company’s water responsibilities (Wicaksono & Setiawan, 2022); once companies use a large amount of water and contribute to the water crisis, stakeholders will start to influence companies to take action and be responsible for the negative impacts of water usage (Kumar & Singh, 2022; Wicaksono & Setiawan, 2022).

The study was exploratory and had a quantitative approach, which used secondary data from the Refinitiv Eikon database. 668 Brazilian and Indian publicly traded companies were analyzed from 2016 to 2020. While the dependent variable was corporate water disclosure, the independent variables selected were: board size, board gender, and board independence. Analysis was conducted by multivariate analysis. Main and additional tests were conducted using different regression methods and the Generalized Method of Moments (GMM).

The results presented empirical evidence that board size and independence positively affect water disclosure in the basic materials, energy, industrial and utilities sectors. Consistent with previous analyses, the variables of market capitalization, adoption of the Global Compact, and disclosure of a CSR report maintained their positive effect on water disclosure.

Theoretically, we demonstrate how board diversity and independence affect corporate water disclosure and enrich the academic sphere related to corporate water disclosure by adopting variables never used before on econometric approaches. From a managerial standpoint, we confirm that by improving board diversity and independence, companies can be benefited from their investors and regulatory authorities.

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