Tracing the path to sustainable governance: CSR committees as mediators of board impact on ESG performance in the MENA region

Abstract

Purpose

This study aims to explore the mediating role of corporate social responsibility (CSR) committees in the relationship between board characteristics and environmental, social and governance (ESG) performance, specifically within the Middle East and North Africa (MENA) region.

Design/methodology/approach

Based on a panel of 178 firms spanning 2015–2022, the analysis uses Baron and Kenny’s (1986) mediation approach, supplemented by structural equation modeling (SEM) path analysis for robustness.

Findings

The findings demonstrate that CSR committees play a significant mediating role in the impact of board size, expertise and gender diversity on ESG performance. Furthermore, the study confirms the direct, positive influence of both board characteristics and the presence of CSR committees on ESG performance, underscoring their strategic importance in fostering sustainability in this regional context.

Practical implications

The findings highlight the strategic importance of diversifying and enhancing board skills to improve ESG performance. Companies are encouraged to recalibrate their governance frameworks to leverage the mediating influence of CSR committees and promote sustainable business practices.

Social implications

By demonstrating the positive effect of CSR committees on ESG performance, this study aligns with global trends in responsible business conduct and highlights the importance of corporate governance in addressing environmental and social challenges. This alignment is critical for achieving sustainable development goals and reinforcing stakeholder trust in the region.

Originality/value

This research provides novel empirical insights into the mediating effect of CSR committees within the MENA region, offering a unique contribution to the discourse on corporate governance and sustainability. By highlighting region-specific governance dynamics that shape ESG outcomes, it deepens the understanding of effective governance practices.

Citation

Kateb, I. and Alahdal, W.M. (2024), "Tracing the path to sustainable governance: CSR committees as mediators of board impact on ESG performance in the MENA region", Corporate Governance, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/CG-03-2024-0147