Board Diversity and Sustainability Disclosure: Empirical Evidence from Palestine

Abstract

Given the limited environmental, social, and governance disclosure (ESGD) among Palestinian firms, this study’s purpose is to explore potential connections between diversity of board gender and nationality, as well as representation of non-executive directors, environmental, social, and governance factors and aggregate ESG disclosure. The study focuses on industrial companies listed on the Palestine Exchange (PEX), employing random-effects panel-data regression with firm-clustered robust standard errors on a balanced panel of 11 industrial companies, all listed on PEX from 2018 to 2024. The results show that ESGD is positively associated with female directors, foreign directors, and non-executive directors and provide support for agency theory, resource dependence theory, and stakeholder theory. This study furthers the literature via empirical evidence (from a conflict-affected emerging market) on the impact of board gender diversity, nationality diversity, and non-executive directors on ESGD. The study recommends that policymakers and stakeholders promote board independence and diversity of gender and nationality, with a view to enhancing ESG disclosure in Palestine.