Ownership structure and environmental, social and governance performance disclosure: the moderating role of the board independence

Hamzeh Al Amosh,Saleh F.A Khatib

doi:10.1108/jbsed-07-2021-0094

Abstract

PurposeThe current study dealt with the ownership structure effect as a potential determinant of the environmental, social and governance (ESG) performance disclosure in the Jordanian context.Design/methodology/approachUsing the content analysis technique, data were collected and analyzed from a final sample of 51 annual reports of Jordanian industrial companies listed for 2012–2019.FindingsThe results show that foreign ownership and state ownership play a critical role in disclosing the ESG performance. Also, the board's independence plays an influential role in improving disclosure quality, enhancing family ownership in disclosure. It also limits the negative role of block holder ownership and managerial ownership on the ESG disclosure.Originality/valueTo the best of the authors' knowledge, this is the first study that deals with the role of ownership structure on the ESG disclosure level separately and collectively through the moderating role of board independence.

Highlights

In recent decades, the disclosure landscape evolution in a context of well-established interest toward non-financial information at a global level gave rise to many concepts related to social, economic, and environmental issues that have surfaced as a reaction to corporate practices and their effect on the environment in which they operate
The analysis indicates that foreign investment is still in its infancy in Jordan, where the average foreign ownership amounted to, while the minimum of state ownership is 0.00
The current study investigated the impact of the ownership structure, including foreign ownership, state ownership, managerial ownership, block holder ownership, and family ownership on ESG disclosure practices in Jordan

Summary

Introduction

The disclosure landscape evolution in a context of well-established interest toward non-financial information at a global level gave rise to many concepts related to social, economic, and environmental issues that have surfaced as a reaction to corporate practices and their effect on the environment in which they operate. Many stakeholders took the initiative to take an approach to corporate accountability for their role and the extent of their contribution to meeting their aspirations (Manes-Rossi et al, 2018). Companies realized the potential consequences of this. They began to think about the most appropriate means to meet various stakeholders’ aspirations. The companies’ activities and practices became subject to continuous monitoring by the stakeholders, prompting companies to contribute to activities that stakeholders favor.

Methods

Results

Conclusion