Mulching is one of the best thing you could do for your trees. Properly mulched tree will receive more nutrients, help with retaining water and moisture, and reduce weed growth.
However, improperly mulching or creating "mulch volcanoes" can hurt the tree. Piling mulch at the base of the tree could lead to insect and disease problems. Overmulching will also damage the bark and trunk of the tree by having too much moisture which could lead to root rot making the tree unstable.