Informational Contribution of Sustainability Reporting in Mitigating Agency Problem: Evidence from Bangladesh

The objective of the study is to examine whether sustainability disclosures are contributing to eliminating agency problem in Bangladeshi listed banking companies or not. The study covers all the listed commercial banks of the Dhaka stock exchange of Bangladesh for the year 2008-2019. Data regarding sustainable disclosures and other variables have been collected through the content analysis of the annual report. The association of sustainability disclosures and agency cost are investigated through multivariate regression analysis. Sustainability reporting has association with agency cost mitigation is the primary finding. The extent sustainability reporting has significant role in reducing agency problem. Furthermore, findings varied on the basis of the proxy used for measuring agency cost. Findings may have important implication in financial sectors of developing economy. The findings may be different for non-financial sector as well as non-listed company in different regulatory and socio-economic settings. There are a limited number of studies on agency problem in financial sectors. The study has used different proxy of agency cost as well as different measures of sustainability disclosures, which contribute to future studies in the relevant field.