Measuring Corporate Social Responsibility by Constructing an Index: An Empirical Evidence from Oman

Corporate Social Responsibility (CSR) is identified as the main business tool toward the sustainability path. However, the measurement of corporate social responsibility (CSR) is always a source of contention. Researchers use different approaches to measure corporate social responsibility (CSR). The main objective of this study is to measure corporate social responsibility (CSR) by constructing an index, which is one of the common methods used by many researchers to understand the performance of firms toward CSR. The data used in this study is based on the non-financial listed companies at Muscat Securities Market Oman, for the period 2016. Thus, 71 non-financial listed companies are used in this study to construct and measure a CSR disclosure index. This study used a content analysis approach to construct an index for CSR disclosure which covers 40 consisting of five sub-themes to measure CSR disclosure. The significant sections to measure corporate social responsibility are community and its welfare, education and health, environment and energy resources, product-customer area, and finally workers. The result indicates that the CSR disclosure of listed companies at MSM is acceptable because 2016 is the first year in which CSR activities are mandatory for all listed companies. However, some companies are very strong in CSR disclosure, while few companies are still weak and need to focus on developing their CSR charter and disclosing CSR activities.