FACTORS SHAPING CORPORATE SOCIAL DISCLOSURE PRACTICES: EVIDENCE FROM THE SAUDI ARABIAN CONTEXT

Abstract

This research investigates factors influencing corporate social disclosure (CSD) within the context of Saudi Arabia. Specifically, it examines how corporate governance attributes and company characteristics impact the extent of CSD. The study utilizes data from 435 firm-year observations spanning 87 companies listed on Saudi Exchange (Tadawul) during 2015-2019. CSD levels are gauged using an unweighted disclosure index derived from the Global Reporting Initiative (GRI) framework. The results reveal a negative effect of board size on CSD, suggesting that smaller boards may encourage more comprehensive disclosures. Conversely, the effects of board independence and audit committee independence are insignificant. In line with theoretical predictions, larger, profitable, manufacturing companies, as well as those involved in international operations, tend to disclose more social information. The current research contributes to the literature, addressing conflicting findings on the effects of board characteristics and profitability, and exploring the underexplored roles of audit committee independence and internationalization.

Keywords

• corporate social disclosure
• corporate governance
• company characteristics