The advent of the concept of sustainable development encourages and helps corporations to make decisions in a way that protects the environment. There are numerous stakeholders, including governments, banking institutions, shareholders, investors, suppliers, consumers, employees, community residents and environmental organizations, who are interested in the environmental impacts of business activities and who need information on environmental performance. Likewise, the Korean Securities Commission requires corporations to disclose their environmental information in audit report footnotes. Corporate environmental information disclosure(EID) is seen as an opportunity for corporations to visibly demonstrate their commitment to protecting the environment. Many corporations are voluntarily motivated to practice EID. Until now, earlier studies have focused on financial positions, ownership structure and industrial characteristics to determine the main characteristics of corporations disclosure of environmental information. But this study examined the effect of outside director on corporate EID in financial statements, with special attention to the foot notes section of audit reports. An outside director has been introduced to enhance voluntary disclosure and disclosure transparency, it by necessity must include environmental information disclosure (EID). This study differs from previous studies in the following ways. It is the first study investigated the effects of outside director on the disclosure practices of environmental information.
From the results, results indicate that the characteristic of outside director affects EID and the level of EID, confirming that improved governance contributes to improving the level of quality on environmental information disclosure. This study results promise to provide valuable inputs into establishing environmental policies or corporate EID policies.