Corporate Governance Mechanisms and Corporate Social Responsibility (CSR) in Kuwaiti Listed Firms

Firms must maintain a balance between their performance and corporate social responsibility (CSR). This study examines the relationship between corporate governance mechanisms and the CSR of firms listed on the Kuwait Stock Exchange (KSE) within the framework of agency theory. Using a sample of 86 firms in 2019, this study explored five corporate governance mechanisms (i.e., ownership concentration by large shareholders, ownership concentration by government, board size, board independence, and family directors) and five control variables (i.e., debt, firm size, firm age, profitability, and industry type). The study used the index checklist to measure CSR and found that ownership concentration by large shareholders, ownership concentration by government, and board size affect a firm’s social responsibility while other variables have no impact. This study was the first to examine the impact of corporate governance mechanisms on corporate social responsibility in Kuwait after introducing the new corporate governance rules, and the findings will help Kuwait’s government, firms, and investors evaluate the current rules and improve CSR requirements.