ISSN: 2225-8329
Open access
This study aims to design a new framework explaining the relationship between corporate governance (CG) mechanisms and sustainability to discover the presence of a relationship between family-owned corporations and the factors that knit sustainability in these firms. This study addresses the investigation of sustainability disclosure (dependent variable) by inspecting the Corporate Governance (CG) elements (independent variables) in the presence of family ownership/control as a moderator in the prospect model; the data is retrieved from annual reports (published in years 2017-2019) belonging to non-financial companies listed in Amman Stock Exchange (ASE). CG elements include board size, board independence, women on board, and multi-family board membership (when two different members of the board belonging to two different untied families are anticipated other companies’ board membership), The significance of the study resides in its inspection of the current status of achieving sustainability disclosure for the non-financial Jordanian firms listed in the Amman Stock Exchange (ASE). Family ownership, low women representation on boards, and other corporate governance-related issues are tacked in stance with achieving sustainability disclosure among the Jordanian firms. This focus was carried out by defining two dummy variables: the multi-family board’s membership and the overlapping of committee membership. The data is analyzed using Smart-PLS after filling the theoretical gap on how family-owned firms have unique characteristics that undermine the presence and exposure of corporate sustainability.
Ababsa, M. (2011). Citizenship and Urban Issues in Jordan (pp. 39–64). Retrieved from https://halshs.archives-ouvertes.fr/halshs-00652389
Ahmad, N. B. J., Rashid, A., & Gow, J. (2017). Board independence and corporate social responsibility (CSR) reporting in Malaysia. Australasian Accounting, Business and Finance Journal, 11(2), 61–85.
Al-Rahahleh, A. S. (2017). Corporate governance quality, board gender diversity and corporate dividend policy: Evidence from Jordan. Australasian Accounting, Business and Finance Journal, 11(2), 86–104. https://doi.org/10.14453/aabfj.v11i2.6
Al-Sartawi, A. M. . A. . M., & Sanad, Z. (2019). Institutional ownership and corporate governance?: evidence from Bahrain. Afro-Asian J. Finance and Accounting, 9(1).
Alawneh, R., Ghazali, F., Ali, H., & Farhan, A. (2019). A Novel framework for integrating United Nations Sustainable Development Goals into sustainable non-residential building assessment and management in Jordan. Sustainable Cities and Society, 49(November 2018), 101612. https://doi.org/10.1016/j.scs.2019.101612
ALghad Ad. (2016). 700 million dinars, the capital of 30 troubled companies, pp. 1–5. Retrieved from https://alghad.com/
ALghad Ad. (2018). Sustainability requires planning for dealing and balancing variables. Retrieved from https://alghad.com
Ali, M. (2018). Determinants and consequences of board size?: conditional indirect effects, 18(1), 165–184. https://doi.org/10.1108/CG-01-2016-0011
Alkilani, S. Z., Hussin, W., & Salim, B. (2019). The Influence of Audit Committee Characteristics on Modified Audit Opinion in Jordan. Journal of Finance and Accounting, 7(3), 95–106. https://doi.org/10.11648/j.jfa.20190703.14
Alotaibi, M. Z. M. (2019). The Impact of Board Characteristics on the Level of Sustainability Practices Disclosure in Jordanian Commercial Banks Listed on the ASE. European Journal of Scientific Research, 153(4), 353–363. https://doi.org/1450-216X / 1450-202X Vol.
Amran, A., Zain, M. M., Sulaiman, M., Sarker, T., & Ooi, S. K. (2013). Empowering Society for Better Corporate Social Responsipility:The Case of Malaysia. Kajian Malaysia: Journal of Malaysian Studies, 31(1), 57–78.
Ararat, M., Aksu, M., & Cetin, A. T. (2015). How Board Diversity Affects Firm Performance in Emerging Markets?: Evidence on Channels in Controlled Firms Melsa Ararat *, Mine Aksu and Ayse Tansel Cetin, 23(2), 83–103. https://doi.org/10.1111/corg.12103
ASE. The ASE Issued a Guidance on Sustainability Reporting (2018). Retrieved from https://www.ase.com.jo/en/announcements/ASE-Issued-Guidance-Sustainability-Reporting
Baba, B. U., Manaf, A., & Bahrain, K. (2017). Board Governance mechanisms and sustainability disclosure: A moderating role of intellectual capital. Asian Journal of Multidisciplinary Studies, 5(10), 163–189.
Bezemer, P., Peij, S. C., Maassen, G. F., & Halder, H. Van. (2012). The changing role of the supervisory board chairman?:the case of the Netherlands (1997–2007). J Manag Gov, 16(2), 37–55. https://doi.org/10.1007/s10997-010-9128-3
Bird, R., Huang, P., & Lu, Y. (2018). Board independence and the variability of firm performance?: Evidence from an exogenous regulatory shock. Australian Journal of Managemen, 43(March 2017), 3–26. https://doi.org/10.1177/0312896217708227
Brigham, K. H., & Payne, G. T. (2015). The Transitional Nature of the Multifamily Business. The Transitional Nature of the Multifamily Business, 1339–1347. https://doi.org/10.1111/etap.12173
Chang, Y. K., Oh, W.-Y., Park, J. H., & Jang, M. G. (2017). Exploring the Relationship Between Board Characteristics and CSR?: Empirical Evidence from Korea. Journal of Business Ethics, 225–242. https://doi.org/10.1007/s10551-015-2651-z
Chrisman, J. J., Chua, J. H., Massis, A. De, Frattini, F., & Wright, M. (2015). The Ability and Willingness Paradox in Family Firm Innovation. Product Development & Management Association, 32(3), 310–318. https://doi.org/10.1111/jpim.12207
Chua, J. H., Chrisman, J. J., & Sharma, P. (1999). Defining the Family Business by Behavior. Entrepreneurship Theory and Practice, 23(4), 19–39.
Cigna, G. P., & Meziou, A. (2017). Corporate Governance in Transition Economies Jordan Country Report. European Bank.
Cooper, E., & Uzun, H. (2012). Directors with a full plate?: the impact of busy directors on bank risk. Managerial Finance, 38(6), 571–586. https://doi.org/10.1108/03074351211226238
Deegan, C. (2002). The legitimising effect of social and environmental disclosures - a theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282–311. https://doi.org/10.1108/09513570210435852
Duran, P., & Ortiz, M. (2019). When More Is Better: Multifamily Firms and Firm Performance. Entrepreneurship: Theory and Practice, 00(0), 1–23. https://doi.org/10.1177/1042258719851206
Edwards, M., Halligan, J., Horrigan, B., & Nicoll, G. (2012). Public Sector Governance in Australia.
Eulaiwi, B., Al-Hadi, A., Taylor, G., Al-Yahyaee, K. H., Evans, J., & ?. (2016). Multiple Directorships, Family Ownership and the Board Nominiation Committee: International Evidence from the GCC. Emerging Markets Review, 28, 1–53.
Falato, A., Kadyrzhanova, D., & Lel, U. (2014). Distracted directors?: Does board busyness hurt shareholder value?? $.
Ferris, S. P., Jagannathan, M., & Pritchard, A. C. (2003). Too Busy to Mind the Business?? Monitoring by Directors with Multiple Board Appointments. THE JOURNAL OF FINANC, LVIII(3), 1087–1111.
Ganesan, Y., Hwa, Y. W., Jaaffar, A. H., & Hashim, F. (2017). Corporate Governance and Sustainability Reporting Practices: The Moderating Role of Internal Audit Function. Global Business & Management Research, 9(4), 159–179. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=ent&AN=127011679&site=ehost-live
Garcia-Sanchez, I. M., Gomez-Miranda, M. E., F.David, & Rodríguez-Ariza, L. (2019). Board independence and GRI-IFC performance standards?: The mediating effect of the CSR committee, 225, 554–562. https://doi.org/10.1016/j.jclepro.2019.03.337
García?Sánchez, I. M., & Martínez?Ferrero, J. (2017). Independent directors and CSR disclosures: The moderating effects of proprietary costs. Corporate Social Responsibility and Environmental Management, 24(1), 28–43.
Goyal, R., Kakabadse, N., & Kakabadse, A. (2019). Improving corporate governance with functional diversity on FTSE 350 boards?: directors ’ perspective, 3(2), 113–136. https://doi.org/10.1108/JCMS-09-2019-0044
Grahovar, M. (2010). The Role of Corporate social disclosure Trust,reputation or fashion tool? Retrieved from Https://Gupea.Ub.Gu.Se/Bitstream/2077/30501/1/Gupea_2077_30501_1.Pdf.
Guthrie, J., & Parker, L. D. (2012). Legitimacy Theory Corporate Social Reporting?: A Rebuttal of Legitimacy Theory. Accounting and Business Research, 19(December 2014), 37–41. https://doi.org/10.1080/00014788.1989.9728863
Hafsi, T., & Turgut, G. (2013). Boardroom Diversity and its Effect on Social Performance: Conceptualization and Empirical Evidence. Journal of Business Ethics, 112(3), 463–479. https://doi.org/10.1007/s10551-012-1272-z
Hahn, R., & Kühnen, M. (2013). Determinants of sustainability reporting?: a review of results , trends , theory , and opportunities in an expanding fi eld of research. Journal of Cleaner Production, 59, 5–21. https://doi.org/10.1016/j.jclepro.2013.07.005
Hajawiyah, A., Adhariani, D., & Djakman, C. (2019). The sequential effect of CSR and COE?: family ownership moderation, 15(7), 939–954. https://doi.org/10.1108/SRJ-09-2017-0179
Haque, F., & Ntim, C. G. (2020). Executive Compensation , Sustainable Compensation Policy , Carbon Performance and Market Value. British Journal of Management, (January). https://doi.org/10.13140/RG.2.2.21870.56647
Hausmann, R., Brien, T. O., Santos, M. A., Grisanti, A., Kasoolu, S., Taniparti, N., … Villasmil, R. (2019). Jordan: The Elements of a Growth Strategy Ricardo.
Hörisch, J., Freeman, R. E., & Schaltegger, S. (2014). Applying Stakeholder Theory in Sustainability Management: Links, Similarities, Dissimilarities, and a Conceptual Framework. Organization and Environment, 27(4), 328–346. https://doi.org/10.1177/1086026614535786
Hussain, N., Rigoni, U., & Orij, R. (2018). Corporate Governance and Sustainability Performance?: Analysis of Triple Bottom Line Performance, 411–432. https://doi.org/10.1007/s10551-016-3099-5
Ihlen, Ø., & Bartlett, J. L. (2011). The Role of Corporate Social Responsibility in Enhancing Corporate Reputation by Alfonsus B . Susanto Book Review?: Values and Stakeholders in an Era of Social Responsibility by Rachel English Passing the buck?: the new approach to managing by David Crowt. https://doi.org/10.1002/9781118083246
Janggu, T., Darus, F., Zain, M. M., & Sawani, Y. (2014). Does good corporate governance lead to better sustainability reporting? An analysis using structural equation modeling. Procedia-Social and Behavioral Sciences, 145, 138–145.
JCGC. (2017). Jordan Corporate Governance Code. https://doi.org/https://www.ase.com.jo/sites/default/files/2018-11/Corporate_Governance_Regulations.pdf
Jizi, M. (2017). The influence of board composition on sustainable development disclosure. Business Strategy and the Environment, 26(5), 640–655.
Kakanda, M. M., & Salim, B. (2017). Corporate governance, risk management disclosure, and firm performance: A theoretical and empirical review perspective. Asian Economic and Financial Review, 7(9), 836.
Kang, H., Cheng, M., & Gray, S. J. (2007). Corporate Governance and Board Composition?: diversity and independence of Australian boards. Journal Compilation © 2007 Blackwell Publishing Ltd, 15(2), 194–207.
Kotlar, J., Massis, A. De, Frattini, F., & Kammerlander, N. (2019). MOTIVATION GAPS AND IMPLEMENTATION TRAPS: THE PARADOXICAL AND TIME-VARYING EFFECTS OF FAMILY OWNERSHIP ON FIRM ABSORPTIVE CAPACITY. Journal of Product Innovation Management, (August). https://doi.org/10.1111/jpim.12503
Latif, R. A., Kamardin, H., Nisham, K., Mohd, T., & Adam, N. C. (2013). Multiple Directorships , Board Characteristics and Firm Performance in Malaysia. Scientific & Academic Publishing, 3(2), 105–111. https://doi.org/10.5923/j.mm.20130302.07
Lohrey, R. C., Wilmshurst, T. D., Horner, C. A., & Williams, B. R. (2019). Coming to grips with corporate governance in local government. Institute of Public Administration Australia, (February), 1–17. https://doi.org/10.1111/1467-8500.12395
Lozano, R. (2015). A holistic perspective on corporate sustainability drivers. Corporate Social Responsibility and Environmental Management, 22(1), 32–44.
Manning, B., Braam, G., & Reimsbach, D. (2019). Corporate governance and sustainable business conduct—Effects of board monitoring effectiveness and stakeholder engagement on corporate sustainability performance and disclosure choices. Corporate Social Responsibility and Environmental Management, 26(2), 351–366. https://doi.org/10.1002/csr.1687
Ministry of Planning & International Cooperation Jordan. (2017). THE HASHEMITE KINGDOM OF JORDAN Jordan’s Way to Sustainable Development First National Voluntary review on the implementation of the 2030 Agenda. Retrieved from https://sustainabledevelopment.un.org/content/documents/16289Jordan.pdf
Mohammed, N. H., Nor, K., Ku, I., & Amran, N. A. (2019). Corporate Governance and Accounting Conservatism?: The Moderating role of Family Ownership, 3(2), 119–123.
Moore, J. E., Mascarenhas, A., Bain, J., & Straus, S. E. (2017). Developing a comprehensive definition of sustainability, 1–8. https://doi.org/10.1186/s13012-017-0637-1
Nabulsi, A. (1995). Mating patterns of the Abbad Tribe in Jordan. In Social biology (pp. 42(3-4), 162–17). https://doi.org/https://doi.org/10.1080/19485565.1995.9988898
Naldi, L., Chirico, F., Kellermanns, F. W., & Campopiano, G. (2015). All in the Family?? An Exploratory Study of Family Member Advisors and Firm Performance. https://doi.org/10.1177/0894486515581951
Nas, T. I., & Kalaycioglu, O. (2016). The effects of the board composition, board size and CEO duality on export performance. Management Research Review.
Naseem, M. A., Rehman, R. U., Ikram, A., & Malik, F. (2017). Impact of board characteristics on corporate social responsibility disclosure. Journal of Applied Business Research (JABR), 33(4), 801–810.
Orazalin, N., & Mahmood, M. (2019). Determinants of GRI-based sustainability reporting?: evidence from an emerging economy. https://doi.org/10.1108/JAEE-12-2018-0137
Ortiz-de-mandojana, N., Aguilera-caracuel, J., & Morales-raya, M. (2016). Corporate Governance and Environmental Sustainability: The Moderating Role of the National Institutional Context. John Wiley & Sons, 164(October 2014), 150–164. https://doi.org/10.1002/csr.1367
Oxelheim, L., & Randøy, T. (2001). The Impact of Foreign Board Membership on Firm Value. Journal of Banking and Finance.
Rajharia, P., & Sharma, B. (2014). Corporate Governance In India Evolution , Issues And Challenges For The Future. International Journal of Scientific Research and Management (IJSRM), 2(12), 1815–1824. https://doi.org/2321-3418
Randoy, T., Oxelheim, L., & Thomsen, S. (2006). A Nordic perspective on corporate board diversity.
Rao, K., & Tilt, C. A. (2015). Board Composition and Corporate Social Responsibility?: The Role of Diversity , Gender , Strategy and Decision Making. Journal of Business Ethics, (August 2016). https://doi.org/10.1007/s10551-015-2613-5
Ross, S. A. (1973). The Economic Theory of Agency: The Principal’s Problem. American Economic Association, 63(2). Retrieved from https://www.jstor.org/stable/1817064
Saidat, Z., Seaman, C., Silva, M., Al-Haddad, L., & Marashdeh, Z. (2019). Female Directors, Family Ownership and Firm Performance in Jordan. International Journal of Financial Research, 11(1), 206. https://doi.org/10.5430/ijfr.v11n1p206
Seidl, D., Sanderson, P., & Roberts, J. (2013). Applying the ’comply-or-explain’ principle: discursive legitimacy tactics with regard to codes of corporate governance. University of Zurich Main Library, 17, 791–826. https://doi.org/10.1007/s10997-011-9209-y
Srivastava, N. K. (2015). Does governance structure have any effect on firm performance during the financial crisis. Journal of Strategy and Management, 8(4), 368–383. https://doi.org/10.1108/JSMA-02-2015-0014
Tang, D. Y., & Zhong, R. (2019). Mandatory Sustainability Disclosure and Stock Price Crash Risk.
Tricker, R. B., & Tricker, R. I. (2015). Corporate Governance: Principles, Policies, and Practices.
Velte, P. (2017). Does board composition have an impact on CSR reporting? Problems and Perspectives in Management, 15(2), 19–35. https://doi.org/10.21511/ppm.15(2).2017.02
Vu, N. H., & Nguyen, T. (2017). Impacts of corporate governance on firm performance-Empirical studies of listed Singaporean companies.
Wang, M.-C. (2017). The relationship between firm characteristics and the disclosure of sustainability reporting. Sustainability, 9(4), 624.
Yadava, R. N., & Sinha, B. (2016). Scoring Sustainability Reports Using GRI 2011 Guidelines for Assessing Environmental , Economic , and Social Dimensions of Leading Public and Private Indian Companies. Journal of Business Ethics, 549–558. https://doi.org/10.1007/s10551-015-2597-1
Zahid, M., Rahman, H. U., Ali, W., Khan, M., Alharthi, M., Imran Qureshi, M., & Jan, A. (2020). Boardroom gender diversity: Implications for corporate sustainability disclosures in Malaysia. Journal of Cleaner Production, 244, 118683. https://doi.org/10.1016/j.jclepro.2019.118683
Nazzal, A. M., & Ali, A. J. (2024). Examining the Relationship between Corporate Governance and Corporate Sustainability Disclosure in Jordan with the Moderating Role of Family Ownership/Control. International Journal of Academic Research in Accounting, Finance and Management Sciences, 14(4), 467–483.
Copyright: © 2024 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode