Audit Chair Characteristics and ESG Disclosure: Evidence from the Saudi Stock Market

Abstract

This study examines the influence of audit committee chair (ACC) characteristics on environmental, social, and governance (ESG) disclosure within the Saudi stock market. Analyzing data from 40 non-financial firms from 2017 to 2022, our analysis yields three key findings. First, ACC accounting expertise positively correlates with enhanced ESG disclosure, indicating that financially proficient chairs improve sustainable governance practices. Second, while ACCs with multiple directorships negatively impact ESG scores, this relationship is not statistically significant, suggesting that other factors may mitigate the drawbacks of multiple directorships. Third, the independence of ACCs has a substantial positive impact on ESG disclosure, emphasizing the importance of autonomous chairs in enhancing ESG integrity and transparency. These findings align with Saudi Vision 2030, promoting sustainable and ethical business practices. Future research should explore the impact of ACC characteristics on ESG performance across different contexts and industries.