Do boards matter for financial inclusion disclosure? The moderating role of audit committee activity in South African banks
Ahmed Eid Mohamed Abo El Matey, Ahmed Hassanein, Mohamed Moshreh Ali AhmedPurpose
This study aims to scrutinize whether the corporate board characteristics, specifically board size (BS), gender diversity (GD), board independence (BI) and board activity (BA), influence financial inclusion disclosure (FID) in South African banks. It further investigates the moderating role of audit committee activity (ACA) in strengthening these relationships within the mandatory integrated reporting (IR) environment.
Design/methodology/approach
Using a sample of the largest South African banks between 2018 and 2024, the study uses manual content analysis to construct a novel 40-item FID Index. Multiple regression models are used to test both the direct effects of board characteristics and the moderating effects of ACA.
Findings
The results reveal that BS is negatively and significantly associated with FID. GD shows a positive but insignificant relationship with FID, while BA is positively and significantly associated with FID. Importantly, ACA has a strong positive effect and moderates key relationships, amplifying the influence of board GD and converting the adverse effect of BI into a positive driver of disclosure.
Research limitations/implications
The study is limited to South Africa and has a relatively small sample. Future research could extend to cross-country comparisons in emerging markets, incorporate additional governance variables and examine broader institutional determinants of FID.
Practical implications
The findings provide actionable insights for regulators, policymakers and bank managers. Strengthening ACA and fostering larger, more gender-diverse boards can enhance transparency in disclosure, bolster stakeholder trust and align reporting with national development priorities.
Originality/value
To the best of the authors’ knowledge, this study is the first to comprehensively examine board characteristics and ACA as determinants of FID. It provides a novel disclosure index, integrates multiple governance dimensions and draws on evidence from South Africa’s unique IR context. The findings advance the governance and disclosure literature, highlighting the transformative role of audit committees and offering replicable methodological insights.