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Does the chairman’s political and royal authority matter? Evidence from ESG disclosure in Gulf Cooperation Council

Research Authors
Hesham Nagdy Mohammed Abdelgawad
Research Date
Research Department
Research Journal
Journal of Financial Reporting and Accounting
Research Member
Research Publisher
Emerald Publishing Limited
Research Rank
Scupos, WoS (Q1)
Research Vol
ahead-of-print.
Research Website
https://doi.org/10.1108/JAEE-04-2022-0115
Research Year
2024
Research_Pages
947-973
Research Abstract

Abstract Purpose– This study aims to explore the influence of the chairman’s political and royal authority on environmental, social and governance (ESG) disclosure within the context of nonfinancial companies listed in the Gulf Cooperation Council (GCC).

Design/methodology/approach– The authors adopt a mixed-methods approach, analyzing a data set of 262 nonfinancial GCC companies from 2016 to 2021. The authors use content analysis to collect the ESG disclosure data based on the ESG Disclosure Guidance provided by the GCC Financial Markets Committee. Quantitative methods are applied to investigate the effect of the chairman’s political and royal authority on ESG disclosure. The credibility of the findings is fortified through rigorous robustness and endogeneity tests.

Findings– Consistent with the resource-based view and servant leadership theory, the authors found a positive impact of the chairman’s political and royal authority on ESG disclosure.

Practical implications– The findings of this study insight investors to consider the complex relationship between political affiliations and governance practices to align investments with sustainability and ethical criteria, thereby improving investment strategies in these contexts. This research offers a solid foundation for regulatory craft governance frameworks that acknowledge and incorporate the unique influence of royal family members and politically connected individuals within corporate boards.

Originality/value– This study enhances the discourse on ESG disclosure by focusing on the underrepresented GCC region. This research breaks new ground by focusing on the impact of the chairman’s political and royal authority on ESG disclosure. In addition, it addresses previous methodological limitations by incorporating more comprehensive ESG data for the GCC market.

Keywords ESG disclosure, Chairman’s political and royal authority, GCC companies, Servant leadership theory