Sustainability Reporting Assurance: How Corporate Boards Differ Worldwide

The study examines how corporate governance relates to external assurance across Africa, Asia and Pacific, Europe, North America, and South/Latin America. The findings challenge the assumption that a particular board structure will have the same relationship with reporting oversight everywhere.

A company's sustainability report can describe cleaner operations, better working conditions and responsible leadership without giving readers much reason to trust those claims. An independent review, known as sustainability assurance, adds outside scrutiny to what the company reports. The decision to arrange that review is connected to who sits on the board, who owns the business and where it operates.

Research by Kholod Fahad Alsahali explores those connections in "Regional Differences in Sustainability Reporting Assurance: The Role of Corporate Governance Attributes," published in the Journal of Risk and Financial Management. The study examines how corporate governance relates to external assurance across Africa, Asia and Pacific, Europe, North America, and South/Latin America. The findings challenge the assumption that a particular board structure will have the same relationship with reporting oversight everywhere.

The research separates two decisions: whether a company gets its sustainability report checked and whether it hires a Big Four accounting firm for that work. Board gender diversity and dedicated sustainability committees show some of the most consistent positive links with obtaining assurance across several regions. Choosing the provider follows a different pattern, with ownership, board leadership and audit committees showing relationships that depend on the region.

What the Study Examined Across Five Regions

The analysis draws on Refinitiv ESG data covering 16,457 company-year observations between 2010 and 2020, meaning individual companies can appear in several years. It examines board size, meeting frequency, women's representation, independent directors, separation of chief executive and chair roles, sustainability committees, audit committees and ownership. The models account for company size, profitability, debt, industry and year to help distinguish these relationships from other business differences.

External assurance appeared in 66.5% of European observations, compared with 59.6% in South/Latin America, 57.4% in Africa and 56.7% in Asia and Pacific. North America recorded the lowest rate at 32.8%, showing how widely assurance practices differed within this sample. These figures describe the businesses and years studied, rather than every company operating in those regions.

The provider analysis used 7,231 observations with the necessary information available, a smaller sample because it covered assured reports and excluded records with missing data. Big Four providers accounted for 90% of the South/Latin American provider sample, 71.7% in Europe and 63.2% in Africa. Their shares were 39.9% in Asia and Pacific and 32.4% in North America, where other providers handled most of the engagements captured.

The Board Features Linked to Independent Checks

Greater representation of women on boards was associated with obtaining assurance in Africa, Asia and Pacific, and Europe. Dedicated sustainability committees showed a positive relationship in Asia and Pacific, Europe, and North America, making them another recurring feature among companies seeking outside review. These patterns suggest that board composition and focused sustainability oversight deserve attention, without proving that adding directors or creating a committee causes a company to obtain assurance.

Larger boards were positively linked with assurance in Africa, Asia and Pacific, and Europe. More frequent board meetings had a positive relationship in Europe and a negative relationship in Asia and Pacific, where greater board independence was also linked with lower assurance uptake. Separating the chief executive and chair roles showed no clear relationship with obtaining assurance in the regional models.

Institutional ownership was associated with lower assurance uptake in Europe and North America, and ownership concentrated in large shareholdings showed a negative relationship in Asia and Pacific and North America. European audit committee expertise and independence were positively linked with assurance, with audit committee independence showing a negative relationship in Africa. Formal comparisons supported regional differences for board size, meeting frequency, gender diversity, board independence and both ownership measures, underscoring the need to read governance features in their local setting.

Why Choosing a Big Four Provider Is a Separate Decision

Women's board representation was positively associated with selecting a Big Four provider in Asia and Pacific, Europe, and North America. Sustainability committees showed no clear link with provider choice in any of the four separately analysed regions, despite their recurring connection with obtaining assurance. A company's commitment to independent review does not automatically tell readers which kind of reviewer it will choose.

Larger boards were linked with lower Big Four selection in Africa and Asia and Pacific, and higher selection in Europe. Separating chief executive and chair roles was negatively associated with Big Four selection in Africa and positively associated in North America, with board independence showing a positive relationship in Asia and Pacific. European companies with greater audit committee expertise or independence were less likely to select a Big Four provider.

Institutional ownership was negatively associated with Big Four selection in Europe and North America, and large-shareholder ownership showed negative links in Africa, Asia and Pacific, and North America. Formal regional comparisons supported differences across most governance attributes, including board size, leadership separation, gender diversity, independence, audit committee characteristics and ownership. Meeting frequency showed no clear regional difference, and the evidence for sustainability committees was weaker.

What Readers Can Learn and What Remains Unanswered

The study interprets these patterns through institutional theory, which connects business practices to surrounding rules, professional expectations and social pressures. For boards, investors and policymakers, the findings suggest that governance arrangements need to be understood alongside the environment in which companies operate. Assessing whether a report receives external assurance and examining who supplies it are separate parts of understanding a company's reporting oversight.

The evidence identifies associations rather than cause and effect, and it covers a period when sustainability assurance was predominantly voluntary. Broad regional groupings can hide national differences, and the recorded board characteristics cannot reveal the quality of discussions, directors' engagement or a company's attitude toward transparency. South/Latin America had just 94 observations in the assurance analysis and 50 in the provider analysis, making its estimates less dependable and preventing a separate regional provider model.

Checks using alternative industry groupings and earlier governance measures broadly supported the main regional pattern, with some individual relationships becoming weaker. An additional check could not rule out bias arising from the fact that provider choice is observed only among companies obtaining assurance. Research examining board behaviour, individual countries, regulatory changes and AI-assisted reporting could help explain more precisely how companies decide to put their sustainability claims under outside scrutiny.