Board Financial Expertise and Financial Sustainability: Evidence from Saudi-Listed Firms

Mohammed Naif Alshareef and Hamid Ghazi H Sulimany ()
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Mohammed Naif Alshareef: Department of Accounting, College of Business, Umm-Al-Qura University, Makkah P.O. Box 714, Saudi Arabia
Hamid Ghazi H Sulimany: Accounting Department, Business Administration College, Taif University, Alhawiya, Airport District, Taif P.O. Box 11099, Saudi Arabia

Sustainability, 2024, vol. 16, issue 16, 1-14

Abstract: This paper evaluates the effects of board financial expertise on the financial sustainability of Saudi non-financial listed companies. The research sampled data from 97 companies covering 2013 to 2022 and analysed the data using different econometric models. The research findings indicated a strong and positive impact of board financial expertise on sustainable performance. This outcome implies that financial sustainability may increase as the number of finance specialists on the board rises. The evidence supports agency framework, resource dependency, and upper echelons theories. These frameworks argue that stringent monitoring, technical advice, and intellectual competence of finance specialists may positively influence organisational outcomes. Practically, the results indicated that Saudi-listed firms should emphasise employing financial specialists on their boards to boost their value and attain sustainable growth. The study may also guide managers and regulators on the relevance of financial experts in promoting sustainable practices.

Keywords: board financial expertise; sustainable performance; Saudi-listed firms; generalised method of moments (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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