Corporate Governance and Macroeconomic Antecedents of Sustainability Disclosure

Abstract

The research investigated the correlation between corporate governance 
frameworks and macroeconomic variables, as well as the sustainability 
reporting practices of 80 non-financial entities listed on the Pakistan 
Stock Exchange (PSX) during the period of 2018 to 2023. Anchored in 
stakeholder theory, the investigation utilized content analysis of annual 
reports to evaluate economic, environmental, and social disclosures 
based on an index that aligns with Global Reporting Initiative (GRI) 
standards. The research presents significant implications for the 
advancement of sustainability governance in emerging economies that 
grapple with macroeconomic instability. A regression analysis was 
employed to evaluate the proposed hypotheses. The results reveal that 
both board size and an increase in GDP growth exert a significant 
positive influence on all dimensions of sustainability disclosures—
 namely economic, environmental, and social. These findings accentuate the critical role played by robust internal governance structures and a 
conducive economic milieu in enhancing corporate transparency and 
legitimacy. The study proffers essential policy implications for the 
enhancement of sustainability governance, particularly in emerging 
economies marked by macroeconomic volatility.