An examination of board diversity and corporate social responsibility disclosure: evidence from banking sector in the Arabian Gulf countries

Ayman Issa, Mohammad A.A. Zaid, Jalal Rajeh Hanaysha and Ammar Gull ()

International Journal of Accounting & Information Management, 2021, vol. 30, issue 1, 22-46

Abstract: Purpose - The purpose of this study is to examine the impact of board diversity (e.g. education, gender, nationality and royal family members) on voluntary corporate social responsibility (CSR) disclosure for a sample of banks listed in the Arabian Gulf Council countries. Design/methodology/approach - The authors use the Global Reporting Initiative guidelines to construct the CSR disclosure index. The empirical analysis is based on the data of banks listed in the Gulf Cooperation Council countries over the period 2011–2019. To tackle the potential issue of endogeneity, the authors apply the system generalized method of moments (GMM) estimation approach to investigate the relationship between board diversity and CSR disclosure index. Findings - The findings of the analysis show that there is a significant relationship between board diversity and the level of voluntary CSR disclosure. Specifically, the authors find that diversity captured by the education level, nationality and the presence of royal family members on board is positively associated with the level of voluntary CSR disclosure while diversity captured by the gender of board members is negatively associated with the level of voluntary CSR disclosure. Practical implications - The regulators, policymakers, stakeholders and the board of directors become aware of the diversity mechanisms that must be used to promote CSR practices in the banking sector of Arabian Gulf countries. Originality/value - The authors extend the existing literature by providing empirical evidence on the association between board diversity and voluntary CSR disclosure practices of banks operating in the Arabian Gulf countries. This study also highlights that board gender diversity may have a different impact on voluntary CSR disclosure between developed countries and developing countries. This paper also provides preliminary evidence on the importance of education level, the presence of foreign and royal directors on board to influence CSR practices of banks operating in the Arabian Gulf countries.

Keywords: Corporate governance; Arabian Gulf region; Corporate social responsibility (CSR); Board diversity; Arabian Gulf countries (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijaimp:ijaim-07-2021-0137

DOI: 10.1108/IJAIM-07-2021-0137

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