Exploring the Moderating Role of Board Characteristics in the Relationship Between Environmental Disclosure Quality and Financial Performance: Evidence from Jordan

Environmental disclosure is a recent development in the field of corporate reporting. Indeed, it is a tool that effectively shows a company's ability to generate financial performance over a period of time. Hence, this study aims to investigate the influence of environmental disclosure quality (EDQ) on financial performance and explore the moderating influence of Board Characteristics as a key of corporate governance (CG) on this association. The author developed and investigated hypotheses using agency theory, legitimacy theory, and stakeholder theory. A total of 164 firm-year observations were acquired for the study from the financial statements and notes of 21 Jordanian enterprises. The information was gathered between 2017 and 2021, a span of five years. Panel data analysis and Ordinary Least Squares (OLS) were used in this study. The findings show a substantial and statistically significant relationship between financial performance and environmental disclosure quality. Consequently, it can be seen that financial performance is positively impacted by good environmental disclosure while it is negatively impacted by insufficient disclosure. Additionally, the data shows that the board's characteristics—specifically, its independence, gender diversity, and education level—have a moderating effect on the relationship between EDQ and financial performance.