Governance mechanisms and environmental disclosure under evolving regulatory requirements: evidence from Moroccan listed firms

Purpose In a context characterized by a soft law legal transition, this paper aims to analyze how ownership structure and governance characteristics affect the extent of environmental disclosure (ED) among nonfinancial companies listed on the Casablanca stock exchange (CSE). Design/methodology/approach Content analysis, using a 23-item checklist, was used to assess the extent of ED in the annual reports of 45 companies from 2019 to 2023. The study uses generalized least squares to investigate the relationships between ownership structure (institutional and foreign), governance characteristics (board size, independence, diversity, CEO duality and auditor size) and the extent of ED. Findings Findings reveal that board size, percentage of female directors, auditor size and foreign ownership positively influence the extent of ED in nonfinancial companies listed on the CSE. Conversely, the percentage of foreign directors and CEO duality negatively influences ED. Several tests were performed to confirm the robustness of the results and to rule out endogeneity issues. Originality/value This research contributes new empirical evidence from an understudied emerging market and reevaluates the relevance of classical theories in a specific institutional context. To the best of the authors’ knowledge, this is one of the few studies to examine ED following Circular 03/2019, offering a recent perspective on its determinants.