The efficacy of corporate boards, the ethical behavior of firms, and the strength of auditing and reporting standards: African evidence

Download This Article

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This paper examines the relationship between the efficacy of corporate boards and the strength of auditing and reporting standards (SARS) in African countries and tests whether the ethical behavior of firms affects this relationship. The dataset in this study comprises 96 observations spanning the years 2015 to 2017. Data are gathered from the Global Competitiveness reports for the same years. Findings suggest that the efficacy of corporate boards is positively related to the SARS. Similarly, when examining whether the ethical behavior of firms affects this relationship, the association between the efficacy of corporate boards and the SARS is positive and significant for the high ethical behavior sub-sample, while it is insignificant for the low ethical behavior sub-sample. This moderating effect is further confirmed when using an interaction variable between the ethical behavior of firms (dummy variable: 1 if the considered African country has a score of ethical behavior of firms inferior to or equal to the median and 0 otherwise) and the efficacy of corporate boards, as this interaction term has a negative effect on the SARS. The findings contribute to the theoretical advancement of corporate governance research by demonstrating that the efficacy of corporate boards plays a pivotal role in enhancing the SARS in African countries. Furthermore, they underscore the critical moderating influence of business ethics in reinforcing this relationship. The findings offer insights for policymakers and managers, suggesting that fostering ethical behavior in firms is essential to strengthening the impact of effective corporate boards on auditing and reporting quality.

Keywords: Efficacy of Corporate Boards, Ethical Behavior of Firms, SARS, African Countries

Authors’ individual contribution: Conceptualization — I.A. and S.C.; Methodology — I.A. and S.C.; Formal Analysis — I.A. and S.C.; Investigation — I.A. and S.C.; Writing — Original Draft — I.A. and S.C.; Writing — Review & Editing — I.A. and S.C.

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

JEL Classification: M21, M42, M48

Received: 27.08.2025
Revised: 05.11.2025; 22.11.2025
Accepted: 17.12.2025
Published online: 19.12.2025

How to cite this paper: Achek, I., & Chaieb, S. (2025). The efficacy of corporate boards, the ethical behavior of firms, and the strength of auditing and reporting standards: African evidence. Corporate Ownership & Control, 22(4), 133–140. https://doi.org/10.22495/cocv22i4art12