The impact of audit committee attributes on the non fonancial reporting performances : ESG

Abstract

This thesis examines the link between audit committee (AC) characteristics and the quality of non-financial reporting. The study focuses on the environmental, social, and governance (ESG) performance of European listed companies. Stakeholder expectations and disclosure requirements are intensifying. These developments underscore the need for research into the audit committee as an essential governance mechanism supporting transparency, credibility, and accountability in sustainability reporting. The study describes the committee characteristics that may influence ESG performance, drawing on measured data, including overall ESG scores. The main sample consists of 300 European firms selected from Refinitiv Eikon. To supplement missing audit committee characteristic data, a subsample of 52 firms was hand-collected. Regression analysis is used to examine the relationships between audit committee composition and ESG performance. Standard econometric methods are applied to the multi-year panel dataset, with controls for firm size, profitability, leverage, and board characteristics, to isolate the link between audit committee design and ESG performance. The findings indicate a positive relationship between audit committee independence and ESG reporting quality, suggesting that independence enhances objectivity, oversight, and accountability. Expertise provides a marginal, model-dependent advantage. Gender diversity and meeting frequency do not show a statistically significant correlation with improved ESG performance. Overall, these results confirm that audit committee composition is related to the creation of a balanced and well-structured oversight system, in alignment with agency-based monitoring for non-financial reporting. This research makes a significant contribution to the governance literature, offering actionable guidance for practitioners seeking to enhance the quality of ESG disclosures by strengthening audit committee design and formalizing ESG oversight within their mandate.