Corporate philanthropy disclosure and firm performance in Jordan: Board diversity as a moderator

Corporate philanthropy disclosure (CPD) have always attract the attention of businesses, public, government and other stakeholders to enhance firm performance and ensure long-term business sustainability. The purposes of this study are to identify the level of CPD among companies in Jordan and to examine the relationship between CPD and firm performance (FP). The study also aims to examine the moderating role of board of director's (BOD's) diversity (gender, independence, age, educational background and nationality) on the relationship between CPD and FP. based on the agency theory and legitimacy theory. The sample data used in this study comprises 101 companies listed on the Amman Stock Exchange (ASE) from year 2015 to 2020. The current study developed a checklist with 26 disclosure items to measure the level of CPD practices. Data on CPD, FP and BOD's diversity are obtained from companies' annual reports. The current study uses content analysis and Fixed Effect Regression with Driscoll-Kraay standard errors to analyze the data. The findings of this study indicate that banks have the highest disclosure of philanthropy items compared with the other industries. Cash contribution is considered as the most popular item disclosed while Haj and Omrah is the least item disclosed by the companies. In light of the relationship between CPD and FP, the findings reveal that CPD has a significant and positive relationship with FP. Regarding on the moderating variable (BOD's diversity), the current study found that BOD's diversity have partially moderate the relationship between CPD and FP. This study deepens the understanding of the nature of CPD in the context of Jordan. Moreover, the findings are useful to the policy makers in preparing regulations on CPD as well as to provide opportunities for more research in Jordan on the subject.