The Moderating Effect of Corporate Governance Reform on the Relationship between Audit Committee Chair Attributes and ESG Disclosure: Taking Saudi Arabia as an Example

The Mediating Effect of Audit Committee Chair Attributes and ESG Disclosure on Corporate Governance Reform: A Case Study of Saudi Arabia

Abstract This study examines the impact of audit committee chair attributes (such as independence, experience, and related directors) on environmental, social, and governance (ESG) disclosure, focusing on the mediating role of corporate governance reforms (particularly those introduced by the 2017 "Vision 2030" initiative) in the context of emerging markets in Saudi Arabia. The sample covers annual data of listed Saudi companies from 2014 to 2023. Using a fixed-effects regression model, the study analyzes how independent and experienced audit committee chairs significantly improve the quality of ESG disclosure. The findings reveal that independent audit committee chairs effectively ensure the transparency and reliability of ESG disclosures, and governance reforms further strengthen this effect, enhancing the positive impact of ESG information disclosure while mitigating the potential negative impact of related directors on transparency. This research provides practical insights for emerging market firms and regulators on how to optimize governance structures to attract international investors and enhance sustainable development practices.

Introduction Environmental, social, and governance (ESG) disclosure has become a key component of corporate transparency, reflecting a company's responsibility to stakeholders and the environment. As investor and regulatory attention on ESG practices grows, companies must disclose their ESG performance comprehensively and transparently. This not only helps build stakeholder trust but also helps companies reduce environmental and social risks and improve long-term financial performance.

The Role of the Audit Committee The audit committee plays a crucial oversight role in ensuring the quality of ESG disclosure. This committee is responsible for supervising the accuracy and compliance of financial and non-financial reporting, including ESG information disclosure. The attributes of the audit committee chair, such as their independence, expertise, and tenure, directly affect the committee's effectiveness in overseeing ESG disclosure. Independent and knowledgeable chairs are considered more likely to ensure the transparency of ESG disclosures.

Background of Emerging Market Governance Reforms Corporate governance reforms aim to strengthen the institutional framework of corporate operations, aligning local practices with international standards to enhance transparency and bolster investor confidence. However, emerging markets face challenges such as inconsistent regulatory enforcement and differences in the maturity of governance frameworks. In such environments, the role of the audit committee chair becomes even more critical; they need to navigate the complex governance landscape to ensure that the company's commitment to ESG transparency is not undermined.

Research Focus: Saudi Arabia This study selects Saudi Arabia as the focus for three reasons: First, Saudi Arabia has implemented significant corporate governance reforms, particularly regulatory changes brought about by the 2017 "Vision 2030" initiative, which provides a unique background for studying the impact of regulatory reform on governance structures.Research Focus: Saudi Arabia This study has chosen Saudi Arabia as the focus for three reasons: First, Saudi Arabia has implemented major corporate governance reforms, particularly the regulatory changes brought about by the 2030 Vision initiative in 2017, which provides a unique background for studying the impact of regulatory reform on governance structures. Second, as one of the largest economies in the Middle East, Saudi Arabia is a key emerging market where governance and sustainability practices are rapidly evolving but academic research is relatively scarce. Finally, Saudi Arabia has provided enough ESG and corporate governance data to support robust empirical analysis.

• Theoretical Perspectives
• This study examines the impact of audit committee chair attributes on ESG disclosure from multiple angles:
• Corporate Governance and Agency Theory: Independent committees can effectively mitigate management opportunism and reduce information asymmetry, thereby enhancing the credibility of financial and non-financial disclosures.
• Stakeholder Theory: The audit committee chair needs to balance the expectations of investors, regulators, and various societal groups, ensuring that ESG reports reflect a broader range of social and environmental priorities.
• Legitimacy Theory: Governance reforms promote alignment between companies and evolving disclosure standards by increasing the institutional pressure on corporate disclosures, thereby maintaining social acceptance.

Conclusion and Implications The research findings indicate that against the backdrop of governance reforms in Saudi Arabia, the independence and experience of the audit committee chair not only directly improve the quality of ESG disclosures but, more importantly, governance reforms amplify this positive effect, effectively mitigating potential negative impacts from related directors. This provides clear guidance for businesses and policymakers in emerging markets: by strengthening the leadership of the audit committee and combining it with institutional governance reforms, companies can better achieve ESG goals, attract international capital, and promote the deep integration of sustainable practices.

Information Source [Reference: The moderating effect of corporate governance reforms on the relationship between audit committee chair attributes and ESG disclosures | Humanities and Social Sciences Communications, 2026]