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Corporate Governance Mechanisms and ESG Reporting: Evidence from the Saudi Stock Market

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  • Hasan Mohamad Bamahros

    (Department of Accounting, College of Business Administration, University of Hail, Hail 55471, Saudi Arabia
    Department of Accounting, College of Management Science, University of Aden, Aden 9672, Yemen)

  • Abdulsalam Alquhaif

    (Department of Accounting, College of Business Administration, University of Hail, Hail 55471, Saudi Arabia
    Accounting Department, Faculty of Administrative Sciences, Ibb University, Ibb 9674, Yemen)

  • Ameen Qasem

    (Department of Accounting, College of Business Administration, University of Hail, Hail 55471, Saudi Arabia
    Accounting Department, Faculty of Administrative Sciences, Taiz University, Taiz 6803, Yemen)

  • Wan Nordin Wan-Hussin

    (Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia, Kuala Lumpur 50300, Malaysia
    Institute for Management & Business Research (IMBRe), Universiti Utara Malaysia, Sintok 06010, Malaysia)

  • Murad Thomran

    (Department of Accounting, College of Business Administration, University of Hail, Hail 55471, Saudi Arabia)

  • Shaker Dahan Al-Duais

    (Accounting Department, Faculty of Administrative Sciences, Ibb University, Ibb 9674, Yemen
    Quality Inspection Department, Alaziq & Alzailiae CPA, Riyadh 11393, Saudi Arabia)

  • Siti Norwahida Shukeri

    (Department of Accounting, College of Business Administration, University of Hail, Hail 55471, Saudi Arabia)

  • Hytham M. A. Khojally

    (Department of Accounting, College of Business Administration, University of Hail, Hail 55471, Saudi Arabia
    School of Management Studies, University of Khartoum, Khartoum 11115, Sudan)

Abstract

The code of corporate governance in Saudi Arabia places a greater focus on social responsibility initiatives by Saudi companies and the reporting of such activities to the community. The current study examines the relationship between corporate governance mechanisms and environmental, social, and governance (ESG) disclosures amongst Saudi companies. In particular, we extend previous studies by covering unique Saudi corporate governance mechanisms (i.e., the presence of members of the royal family on the board (BROY) and of external members on the audit committee (ACEXT)), and their impact on ESG disclosure. Using 206 company-year observations for Saudi listed companies spanning the period 2010 to 2019, we find the presence of BROY and ACEXT has a positive and significant association with ESG disclosure. The findings of this study may help policymakers to develop regulations regarding corporate governance mechanisms to enhance ESG disclosure.

Suggested Citation

  • Hasan Mohamad Bamahros & Abdulsalam Alquhaif & Ameen Qasem & Wan Nordin Wan-Hussin & Murad Thomran & Shaker Dahan Al-Duais & Siti Norwahida Shukeri & Hytham M. A. Khojally, 2022. "Corporate Governance Mechanisms and ESG Reporting: Evidence from the Saudi Stock Market," Sustainability, MDPI, vol. 14(10), pages 1-20, May.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:10:p:6202-:d:819402
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    3. Kaouther Chebbi & Mohammed Abdullah Ammer, 2022. "Board Composition and ESG Disclosure in Saudi Arabia: The Moderating Role of Corporate Governance Reforms," Sustainability, MDPI, vol. 14(19), pages 1-25, September.
    4. Ameen Qasem & Shaker Dahan AL-Duais & Wan Nordin Wan-Hussin & Hasan Mohamad Bamahros & Abdulsalam Alquhaif & Murad Thomran, 2022. "Institutional Ownership Types and ESG Reporting: The Case of Saudi Listed Firms," Sustainability, MDPI, vol. 14(18), pages 1-23, September.
    5. Hamzeh F. Assous, 2022. "Saudi Green Banks and Stock Return Volatility: GLE Algorithm and Neural Network Models," Economies, MDPI, vol. 10(10), pages 1-18, October.
    6. Amel Kouaib, 2022. "Corporate Sustainability Disclosure and Investment Efficiency: The Saudi Arabian Context," Sustainability, MDPI, vol. 14(21), pages 1-13, October.
    7. Jiamin Nie & Shanli Ye, 2022. "Ownership Structure, Corporate Governance, and Performance of Listed Companies—An Empirical Application of a Semi-Parametric Quantile Regression Model," Sustainability, MDPI, vol. 14(24), pages 1-18, December.

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