The Role of Audit Committee Characteristics in Enhancing the Quality of ESG Accounting Disclosures: Panel Data Evidence from Saudi-Listed Firms

This study focuses on the impact of the audit committee features on the quality of environmental, social, and governance (ESG) disclosure of the Saudi Stock Exchange-listed companies. Grounded in agency theory, stakeholder theory, and resource dependence theory, this research considers key audit committee characteristics, such as independence, expertise, and tenure, to determine the manner in which they contribute to the improvement of ESG disclosure through enhanced monitoring, accountability, and access to critical reporting-related resources. This study employed a regression model as a hypothesis-testing model using panel data of 78 Saudi-listed firms, which represent 234 firm-years until 2023. ESG disclosure quality is measured using the standardized ESG score obtained from the Refinitiv Eikon database. The results indicate that a positive and statistically significant relationship exists between ESG disclosure quality and audit committee independence and expertise. Conversely, the tenure of audit committees has a negative relationship with ESG disclosure quality. This research contributes to the ESG and corporate governance literature by extending audit committee research beyond traditional financial reporting oversight into ESG oversight in an emerging-market context, and by providing context-specific evidence from Saudi Arabia, where ESG reporting frameworks and enforcement mechanisms are still evolving. Practically, the implications of the findings provide useful recommendations to regulators and firms that intend to enhance their governance practices in accordance with the Saudi Vision 2030 and reforms at the Capital Market Authority.