The Impact of Board of Directors Characteristics on Sustainability Performance Disclosure and Its Reflection on Financial Performance: "An Applied Study on Libyan Commercial Banks"

Abstract

This study aims to show the impact of the characteristics of the Board of Directors on the disclosure of sustainability performance and its reflection on the financial performance in Libyan commercial banks, by studying each of the characteristics of the Board of Directors (the size of the Board of Directors, the independence of the Board of Directors, the number of meetings of the Board of Directors) represented in the independent variables and the study of the intermediate variable represented in the disclosure of sustainability performance "social responsibility", As for financial performance, it has been measured through profitability measures represented in the return on Assets (ROA), Return on Equity (ROE)

To achieve the objectives of the study, the descriptive approach and the deductive approach were relied upon, and the method of analyzing the content of the financial statements was used as the main tool in collecting data for the period between (2013-2018), and the study population consisted of commercial banks listed in the main and sub-schedule of the Libyan stock market, which are (6) banks, namely (Republic Bank, Unity Bank, National Commercial Bank, Sahara Bank, Trade and Development Bank, Saraya Bank); Saraya Bank Due to the lack of sufficient data in the disclosure of social responsibility, and testing Hypotheses of the study The multiple regression analysis method was relied upon using cross-sectional time series data (Panel Data) and Structural Equation Modeling (or SEM), to study the extent to which the characteristics of the board of directors affect return on assets (ROA) and return on equity (ROE), and to study the direct and indirect effects on the extent to which the characteristics of the board of directors affect financial performance in light of Intermediate variable Disclosure of sustainability performance.

The results of the study found a statistically significant positive impact of the characteristics of the Board of Directors on the financial performance in Libyan commercial banks, and also found a statistically significant positive impact of the characteristics of the Board of Directors on financial performance in light of the intermediate variable of disclosure of sustainability performance, and based on that the study recommends the issuance of standards and laws by the Central Bank of Libya obliges Libyan commercial banks to increase interest in disclosure of sustainability performance and the rehabilitation and training of employees in banks to be more aware of its importance.