The Impact of Board of Directors and Audit Committee on Sustainability Reporting with the Moderating Role of Moderate Policy: Evidence from the Tehran Stock Exchange

Abstract

This study aimed to examine the effects of the board of directors and audit committee on corporate sustainability reporting and to investigate the moderating role of moderate policy in firms listed on the Tehran Stock Exchange. This applied correlational research adopted a retrospective design. The statistical population consisted of all firms listed on the Tehran Stock Exchange during the six-year period 2018–2023. Using a screening (elimination) sampling method, 109 companies were selected as the final sample. Data were collected from published financial statements available in the CODAL database and stock exchange archives. Sustainability reporting was measured as a binary dependent variable. Independent variables included audit committee size and board size, while moderate policy acted as a moderating variable. Profitability ratio and firm size were incorporated as control variables. Logistic regression (logit model) was employed to test research hypotheses using Eviews software. Regression results indicated that the audit committee had a positive and statistically significant effect on sustainability reporting (β=0.242). Similarly, the board of directors exerted a positive and significant influence on sustainability reporting (β=0.717). Moderate policy demonstrated a direct positive and significant impact on sustainability reporting (β=1.136). Interaction analysis further confirmed that moderate policy significantly moderated the relationship between the audit committee and sustainability reporting (β=0.324). Moreover, the moderating effect of moderate policy strengthened the relationship between the board of directors and sustainability reporting (β=0.205). Overall model statistics confirmed acceptable explanatory power and statistical validity. The findings suggest that corporate governance mechanisms play a critical role in enhancing sustainability reporting practices, and balanced managerial policies strengthen the effectiveness of governance bodies in promoting transparency, accountability, and long-term sustainable value creation within firms.