The impact of boards of directors’ and audit committees’ characteristics on corporate innovation: empirical evidence from the GCC countries

Purpose This study examines the relationship between the characteristics of the board of directors (BoD) and the audit committee (AC) and their impact on corporate innovation in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach Grounded in agency theory (AT) and resource dependence theory (RDT), the research explores the effects of BoD factors, such as board size, independence and the presence of foreign directors, alongside AC characteristics, including size, financial expertise and the presence of independent members, on innovation intensity and expenditure. The study employs the generalized method of moments (GMM) model, analyzing a final sample of 213 firms from five GCC countries, which led to 1,065 observations from the period 2018 to 2022. Findings The results indicate that a larger board size negatively affects corporate innovation, while greater board independence and the presence of foreign directors positively influence innovation. Additionally, AC independence is positively and significantly associated with corporate innovation. Practical implications The study provides valuable insights and offers practical guidance for policymakers on aligning governance policies with national innovation strategies. It enhances the understanding of corporate governance’s role in innovation and highlights its critical role in encouraging an innovative culture within firms. Originality/value The current study contributes to the literature by offering valuable insights into the interplay between corporate governance and innovation within the unique business environment of the GCC region.