Human Rights Disclosures, Corporate Governance Mechanisms, and Firm Performance: Directions for Future Research

Abstract

This paper aims at investigating and scrutinizing prior literature of human rights disclosures, corporate governance mechanisms and their effect on firm performance in an attempt to unveil the influence of non-financial disclosures such as human rights on the corporations financial performance. We highlighted that the board of directors plays a vital role as one of the corporate governance mechanisms in spreading the awareness of the importance of human rights issues that might impact the corporation. Additionally, we propose the need for a change in corporate governance mechanisms to be more accountable towards human rights. Also, our analysis suggests that human rights disclosures impact the corporations image which in turn could be translated into increasing sales that would eventually influence the financial performance of the corporation. Therefore, this paper sheds the light on directions for future research that will explore the association between human rights disclosures and firm performance through incorporating corporate governance mechanisms.