The Effect of Board Characteristics on ESG Commitment in Saudi Arabia: How Diversity, Independence, Size, and Expertise Shape Corporate Sustainability Practices

Asaad Mubarak Hussien Musa (), Rayan Alqubaysi and Hassan Ali Alqahtani
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Asaad Mubarak Hussien Musa: Department of Accounting, College of Business Administration in Hawtat Bani Tamim, Prince Sattam Bin Abdulaziz University, Al-Kharj 11942, Saudi Arabia
Rayan Alqubaysi: Department of Accounting, College of Business Administration in Hawtat Bani Tamim, Prince Sattam Bin Abdulaziz University, Al-Kharj 11942, Saudi Arabia
Hassan Ali Alqahtani: Department of Finance, College of Business Administration in Hawtat Bani Tamim, Prince Sattam Bin Abdulaziz University, Al-Kharj 11942, Saudi Arabia

Sustainability, 2025, vol. 17, issue 12, 1-22

Abstract: This research investigates the effect of board characteristics on environmental, social, and governance (ESG) disclosure among firms listed on the Saudi Stock Exchange (Tadawul) from 2021 to 2023. Motivated by the global shift toward sustainable development and the Saudi Vision 2030 agenda, this study examines how board size, gender diversity, independence, expertise, and compensation impact ESG disclosure practices. Drawing on stakeholder and agency theories, the regression model uses a sample of 78 Saudi-listed companies. ESG disclosure is measured using a content analysis-based checklist that conforms to international and Saudi ESG reporting frameworks. The findings indicate that background and skills, female representation, and compensation positively correlate with ESG disclosure. Conversely, board size and independence do not show significant relationships. The results highlight the pivotal role of board composition in emphasizing business practices for sustainability in emerging markets, particularly within the unique institutional setting of Saudi Arabia. The study contributes to the growing body of ESG literature by offering factual proof from an under-researched context and practical ramifications for investors, legislators, and business executives, as well as seeking to enhance transparency and accountability through effective board governance.

Keywords: board characteristics; ESG disclosure; corporate sustainability; Saudi Vision 2030 (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:12:p:5552-:d:1680503

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