Regional Differences in Sustainability Reporting Assurance: The Role of Corporate Governance Attributes

This study examines whether the associations between corporate governance attributes and sustainability assurance differ across major global regions. Specifically, it investigates how board characteristics, audit committee characteristics, sustainability committee presence, and ownership attributes are associated with firms’ decisions to obtain external sustainability assurance and to choose a Big-4 assurance provider across regions. Using a global sample of 16,457 firm-year observations from 2010 to 2020, this study employs logistic regression models to examine the associations between corporate governance attributes and sustainability assurance and the choice of Big-4 assurance provider across Africa, Asia & Pacific, Europe, North America, and South/Latin America. The analysis is grounded in institutional theory to interpret regional differences in the governance-assurance relationship. The results reveal substantial cross-regional variation in the associations between corporate governance attributes and sustainability assurance and the choice of Big-4 assurance provider. The Wald tests indicate significant regional differences in the associations between governance attributes and firms’ decision to obtain external sustainability assurance for board size, board meeting frequency, board gender diversity, board independence, institutional ownership, and block ownership. Across the regional analyses, board gender diversity and sustainability committees emerge as among the most consistent governance characteristics associated with the decision to obtain external sustainability assurance. The findings for Big-4 assurance provider choice also indicate significant regional differences in the associations for board size, CEO separation, board gender diversity, board independence, audit committee expertise, audit committee independence, institutional ownership, and block ownership. Overall, the findings suggest that the associations between governance mechanisms and sustainability assurance vary across the institutional environment in which firms operate. This study extends the sustainability assurance literature by providing comprehensive cross-regional examinations of how corporate governance is associated with both the decision to obtain sustainability assurance and the selection of Big-4 assurance providers. The study provides evidence that regional institutional contexts are associated with differences in the governance-assurance relationship and highlights the importance of examining the decision to obtain external sustainability assurance and provider choice as related but distinct decisions.