Diversity of first-line defense committee formation in improving the value of long commodity companies

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Abstract

The efficient organization of committees tasked with administrative supervision and risk management within the first-line defense structure is essential for robust corporate governance. This study examines the influence of diversity in first-line defense committees, specifically audit and nomination committees, on business value, as assessed by accounting performance, due to the nascent nature of this technique. The analysis concentrates on essential diversity characteristics, encompassing gender and member nationality. The research analyzes long-established companies in the commodity industry that are publicly traded on the Saudi financial market. Data were gathered from published annual financial reports spanning 2017 to 2022 and evaluated utilizing multiple regression approaches in EViews 10. The results demonstrate the existence of foreign representatives on both audit and nomination committees within the tested firms. Furthermore, the involvement of women in audit committees demonstrates a favorable and statistically significant correlation with business value. Conversely, female presence on nominating committees does not demonstrate a substantial correlation with firm value. These findings highlight the committee-specific impacts of diversity on company value in the Saudi setting. To strengthen the robustness and generalizability of these findings, subsequent research should integrate supplementary governance factors and broaden the analysis to encompass other institutional and economic contexts.

Keywords: Corporate Governance, First-line Defense, Committee Diversity, Commodity Companies, Firm Value, Board Composition, Risk Management, Organizational Performance, Emerging Markets

Authors’ individual contributions: Conceptualization — S.H.A.; Methodology — I.A.E.E.; Software — B.B.A.B. and O.A.A.M.; Validation — E.H.E.M.; Formal Analysis — S.H.A. and N.H.A.A.; Investigation — I.A.E.E.; Resources — B.B.A.B.; Data Curation — O.A.A.M.; Writing — Original Draft — E.H.E.M.; Writing — Review & Editing — S.H.A., I.A.E.E., and N.H.A.A.; Visualization — B.B.A.B. and O.A.A.M.; Supervision — E.H.E.M.; Project Administration — N.H.A.A.; Funding Acquisition — S.H.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D71, G32, H25, H83

Received: 03.11.2025
Revised: 20.12.2025; 30.01.2026
Accepted: 16.02.2026
Published online: 18.02.2026

How to cite this paper: Adam, S. H., Eltahir, I. A. E., Babiker, B. B. A., Mohammed, O. A. A., Musa, E. H. E., & Alnor, N. H. A. (2026). Diversity of first-line defense committee formation in improving the value of long commodity companies. Corporate Board: Role, Duties and Composition, 22(1), 33–45. https://doi.org/10.22495/cbv22i1art3