The effect of the combination of ownership and board of directors of companies on the social responsibility of companies admitted to the Tehran Stock Exchange

Dissertation for M.A.

Abstract:

The present study examines the relationship between the effect of ownership composition and the board of directors of companies on corporate social responsibility in companies listed on the Tehran Stock Exchange. The purpose of this research is to identify the factors affecting the level of social responsibility compliance as an effective factor on investors' decisions. The research period is between 1988 and 1992, which has been considered from various industries in the Tehran Stock Exchange. It has been tested using a simple and multivariable regression method. The results of the research indicate that among the independent variables, ownership concentration and the proportion of responsible members had the greatest impact on social responsibility, and among the control variables, the only variable was the level of education. It has an effect on the dependent variable, which is the social responsibility of companies.

Key words: ownership composition, board of directors, social responsibility

Introduction

The existence of capital markets is one of the tools of economic development. Capital markets and joint stock companies make it possible for a large number of capital owners, with small and large capital, to participate in an economic unit and thus, the problem The provision of large capitals for the creation of large industrial projects is eliminated. By creating a safe and secure stock market, any country can collect the wandering capital of the society and direct it in the ways of production and creation of added value, and through this added value (rights, dividends and government share as taxes, etc.) take a step towards the economic development of the country.

Accounting has a social nature that separates ownership from management, grows and develops, and emphasizes the protection of actual and potential investors. To control fake accounting, most countries have emphasized the concept of disclosure and transparency. The topic of information disclosure is considered the most important part of the ownership structure and corporate governance. The clearer the internal operations of the company and its cash flow are and the more accurately reported, the more limited the areas of embezzlement and mismanagement for managers and major shareholders. The most important topic in the field of information disclosure is that all factors affecting the stock price must be reported at the right time and with sufficient accuracy. This information in the first stage consists of: 1- Income statement 2- Purchase and sale of assets 3- Changes in the board of directors 4- Percentage of ownership of executive directors 5- Change in the ownership of the company 6- Other information that can be disclosed in the next stage are: 7- The amount of the bonus of the board of directors 8- Company strategy 9- Balance sheet risky transaction

In the first chapter, after stating the research problem, we will express the importance and necessity of the research. We also express the research objectives in the form of general and special objectives. The theoretical framework of the research, which was the main basis of the research question and topic, is presented in this chapter, and the research model and research hypotheses are also mentioned. At the end of this chapter, the definitions of words and terms are given. 1-2 Statement of the problem Corporate social responsibility [1] has been a sensitive and attention-grabbing issue in recent years and is considered the basic factor of the remnants of any organization, and leading organizations as accountable organizations, for transparency and accountability to their stakeholders for their performance, must express their commitment to social responsibility through their values ??and ensure that this Obligations flow throughout the organization, it can be safely said that one of the few very important variables that have not been measured by the social responsibilities of companies and is still vague and unknown is the ownership structure in companies. Ownership structure has a core and specific position in corporate literature. Determining the type of structure and composition of the company's shareholders is a control and governance tool in companies. This dimension of governance can be examined in the form of different dimensions that determine the type of ownership of the company, such as ownership distribution, ownership concentration, the presence of major, minor and minority shareholders in the company's ownership composition and their ownership percentage. One of the groups that use the financial statements are the shareholders, therefore it is generally thought that the ownership structure of companies may lead to a change in the behavior of companies. This originates from the monitoring activities that different investors perform in this structure. According to the above, the main goal of this research is to examine the relationship between corporate social responsibility and the structure and composition of ownership in companies.

According to the above, the main purpose of this research is to examine the relationship between corporate social responsibility and the structure and composition of ownership in companies listed on the Tehran Stock Exchange. Among other factors affecting the level of social responsibility compliance by companies is the senior management of companies, the type of management's view of the company's role and duty in society can be effective on this role of companies, if managers are indifferent to this issue and only consider their short-term interests and shareholders, they will show less social responsibility. In this research, we aim to examine these two factors - the composition of shareholders and the composition of managers - on the level of social responsibility of companies. In this case, the question is, does the different ownership structure of the companies have an effect on the social responsibility of the companies? That is, if the owners of the companies are formed by different groups, such as the government, financial institutions, banks and other companies, how will their responsibility be? And which of these different combinations of ownership is more effective.

1-3 Necessity and importance of conducting research

One of the most important goals of business entities is to maximize the rights of its owners (maximizing the value of the company's shares), although today, social considerations can also be considered the main goal of for-profit entities.

For example, saving energy or minimizing environmental pollution or meeting the needs of society are considered among social goals. The policies of a for-profit unit are strategies that are chosen and used to achieve goals (Shabahang, 2017, 4). Theoretically, the goals and policies of a joint-stock company are determined by its owners (shareholders) through the board of directors elected by the general assembly of shareholders. However, due to the major powers given to the top management of companies, the goals and policies are actually determined by the management. In particular, this research is the first research to investigate whether the combination of ownership and the board of directors of companies can affect the social responsibility of organizations or not?

The importance of this research is that it empirically shows financial analysts, investors, managers and users of accounting information how to evaluate the responsibility of companies based on their ownership structure.

1-4 research objectives

General objective:

Identifying and explaining the factors affecting the degree of compliance with social responsibility as an effective factor on the decisions of investors in the stock exchange.

Specific objectives of this research:

Identifying the existence of a relationship between the composition of shareholders on the degree of social responsibility of companies

Identifying the existence of a relationship between the composition of the board of directors and the degree of social responsibility of companies

Application objective:

Investors from the information used in this end use letters to plan and make better decisions.

1-5 research questions

Is there a significant relationship between the degree of ownership concentration of companies and the level of social responsibility of companies?

Is there a significant relationship between the type of ownership of companies and the level of social responsibility of companies? Is there a significant relationship between the dual role of the chairman of the board of directors and the level of social responsibility of companies? Is there a significant relationship between the ratio of changes in the board of directors of companies and the level of social responsibility of companies?

Leverage ratio

Return on assets ratio

Opinion type

Independent auditor

Control variables

Proportion of mandated board of directors

Dual role of the chairman of the board of directors

Dependent variable:

Social responsibility

Independent variable:

Combination of ownership and tenure of the board

Percentage of board changes

1-6-1 Research Hypotheses

Hypothesis 1.