Balancing compliance and conservatism: Stakeholder influences on employment, equal opportunity, and diversity disclosures in Saudi Arabia

Abstract

This study aims to examine how employment, equal opportunity, and diversity (EEOD) disclosures are shaped by dominant stakeholders in Saudi Arabia (SA), including government policies, sociocultural norms, and external pressures from investors and international frameworks. Drawing on stakeholder theory, 248 annual reports from Saudi companies (2008–2022) are analysed, incorporating contextual factors such as religion and policies. The results of this study reveal that religious principles and governmental mandates significantly influence disclosure, leading to cautious transparency. Companies often align reports with Islamic principles. While national initiatives such as Saudization and Vision 2030 encourage workforce participation, reporting primarily emphasizes compliance with domestic labor policies rather than international standards. This highlights the dual pressures firms face in meeting state requirements while maintaining legitimacy within conservative cultural and religious contexts.  The implications of this study are threefold. Regulators should adopt standardized disclosure frameworks that balance global best practices with local sensitivities. International investors can promote transparency by pressing for comprehensive workforce disclosures in line with ESG priorities. For scholars, the study underscores the importance of examining how governance, stakeholder expectations, and cultural-religious factors intersect in shaping workforce reporting, with future research needed across the wider Gulf Cooperation Council (GCC).