Abstract
Purpose – This paper aims to investigate the effect of environmental, social and governance disclosure (ESGD) on firm's financial performance further to exploring moderating effect of board characteristics on this relationship.
Design/methodology– The study uses s data for a sample of 56 non-financial listed companies with a total of 368 firm-year observations during 2017-2022. The data were analyzed using descriptive statistics, Correlation Matrix and panel data regressions such as GLS Fixed effect and pooled OLS. Robustness tests such as multicollinearity, heteroscedasticity and normality test were conducted.
Findings - The results provided that firms with higher ESGD scores have a higher financial performance as measured by ROA and ROE, However, a curvilinear relationship exists between ESGD and ROOA, indicating  the existence of an optimal level of ESGD to maximize ROOA.  In addition, board size has a positive moderating effect on the association between ESGD and financial performance measured by ROA and ROE; however, board independence has a significant moderating effect on the association between ESGD and financial performance measured by ROE only
Research implications – The findings provide feedback to regulators in developing countries, more specifically, the Egyptian regulators, on the benefits of the introduction of Standard & Poor's (S&P)/EGX ESG index. This study recommends that companies in Egypt should establish committees on ESG activities as a strategic component of the CG strategy.
Originality/ value – This study sheds light on rare prior studies exploring the moderating effect of board size and independence on the relationship between ESGD and financial performanc