Audit Committee Characteristics and Environmental Disclosure: Empirical Analysis

Abstract

This study investigates audit committee (AC) characteristics effect on environmental disclosure (ED) in 13 listed banks on Pakistan Stock Exchange. The research develop hypothesis about the relation among  audit committee independence, audit committee financial expertise, audit committee size, audit committee gender diversity, and frequency of audit committee meeting, and environmental disclosure. Despite advancements in reporting standards, many firms still disclose environmental information voluntarily and with varying quality. The audit committee, with its pivotal role in overseeing both financial and non-financial reporting, is hypothesized to significantly influence the quality of environmental disclosures. Researchers examined how different AC attributes influence ED extent and quality, including size, independence, gender diversity, and financial expertise.Utilizing a sample of thirteen banks for the financial year ending December 31, 2023, this study employs data from annual and sustainability reports and relevant disclosures on the banks' websites. The investigation reveals larger audit committees, those with higher independence, greater gender diversity, and significant financial expertise, are positively linked via improved environmental disclosure. The findings underscore the importance of robust audit committee characteristics in enhancing corporate transparency and accountability regarding environmental performance. This study contributes by linking AC features with ED and offers insights for managers, policymakers, and regulators aiming to improve environmental reporting practices in emerging economies.

Keywords: Environmental Disclosure, Gender Diversity, Audit Committee, Firm Size, Expertise.