Inclusivity at the Helm: The Influence of Diverse Boards on Sustainability Reporting

Abstract

Sustainability disclosures are essential for fostering accountability, transparency, and ethical company conduct. This research is carried out to examine the effect of board diversity on the sustainable disclosures of a firm measured. Environmental Reporting Score (ER Score) and Social Score (S Score) measure the sustainability disclosures. At the same time, board diversity is measured concerning gender, religion, and independence. To get precise results, we also included some control variables that could have impacted the disclosures, like auditor type, size, profitability, growth, and a firm's financial leverage. We used a sample of the KSE100 index companies, and Tobit regression analysis was applied. The study's results postulate that firms with a larger board of directors, lesser religious diversity, employing big audit firms, and lower financial leverage tend to have more environmental disclosures.