Sustainability reporting quality: understanding board characteristics, CSR committees and moderation dynamics in Saudi Arabia

Purpose This paper aims to investigate the impact of board characteristics on corporate social responsibility (CSR)/sustainability reporting quality in Saudi Arabia, with a particular emphasis on how CSR committees moderate this relationship. Design/methodology/approach This study analyzes data from 75 firms listed on the Saudi Stock Exchange from 2013 to 2020. The CSR/sustainability reporting quality is assessed using a scoring system ranging from 0 to 2. An interaction analysis is conducted using Panel Ordered Logit Regression to examine the moderating effect of CSR committees on the relationship between board attributes and CSR/sustainability reporting quality. Findings The analysis reveals significant positive impacts of board expertise and attendance on CSR/sustainability reporting quality. The presence of a CSR committee significantly enhances reporting practices. However, board size has a nonsignificant impact on its own. In the presence of a CSR committee, board size becomes positively associated with reporting quality, but this effect is moderated by a negative interaction. Furthermore, the presence of a CSR committee attenuates the positive impact of board attendance. Despite this moderating role, the effect of board attendance remains positive and significant. Conversely, the CSR committee has a nonsignificant moderating effect on board expertise. Practical implications The findings emphasize the importance for Saudi Arabian companies to strategically develop boards with strong CSR expertise and actively involve CSR committees in overseeing CSR activities. This strategic integration is crucial for enhancing the quality of CSR/sustainability reporting, fostering transparency and accountability and facilitating informed decision-making. Social implications By implementing these governance practices, Saudi Arabian companies can strengthen stakeholder trust and contribute to sustainable economic and societal progress within the country. Originality/value This study contributes to the literature on corporate governance and CSR practices by providing empirical evidence of the direct impact of board characteristics and the moderating effect of CSR committees in the Saudi context, offering a nuanced understanding of the complex dynamics between governance mechanisms and CSR/sustainability reporting quality.