Debt, Disclosure, and Diversity: How CSR Disclosure and Board Gender Diversity Influence Firm Leverage: Evidence from the KSE-100 Index

Purpose: The present study examines the correlation between corporate social responsibility (CSR) disclosure and firm value in major Pakistani companies after implementing the Security Exchange Commission of Pakistan (SECP) directive. The goal is to enhance understanding and confirm the suggested association. Furthermore, it will analyze the influence of female boards on this statistical association. Theoretical Framework: A theoretical model was developed by integrating principles of stakeholder theory and then agency theory to test hypotheses. Design/Methodology/Approach: An analysis of the key firms listed on the KSE 100 index of Pakistan from 2017 to 2023 was conducted using the Ohlson model (1995). Findings: The results of the study revealed a direct relationship between the value of a company and its disclosure of corporate social responsibility (CSR) after the introduction of the SECP directive. Furthermore, we show that the existence of gender diversity on boards positively reinforces this link. The present study represents the initial attempt, to the best of our understanding, to examine the potential impact of the transition of the SECP directive on the value relevance of the CSR disclosure obligations within major Pakistani enterprises. Furthermore, this study enhances the existing literature by examining the influence of female boards. Implications/Originality/Value: The results of this study may be of interest to academic scholars, investors, and regulators. Academic scholars find it fascinating to explore the degree to which the significance of CSR disclosure can be improved by the update of the SECP directive. The findings underscore the need to incorporate corporate social responsibility (CSR) measures into the financial operations of investors.