The moderating role of information technology governance in the relationship between board characteristics and continuity management during the Covid-19 pandemic in an emerging economy

The Covid-19 pandemic caused widespread business disruption, forcing many firms to close permanently. The reliance on digital technology increased dramatically, impacting various aspects of life, including economic activity, public health, and environmental behavior. Business continuity management (BCM) became crucial for organizations to mitigate risks and maintain operations. This study focuses on the role of information technology (IT) governance in BCM, particularly in the context of an emerging economy. Existing research has examined BCM and corporate governance characteristics (CGC) separately, but few studies have explored the interplay between CGC, IT governance, and BCM, especially during a crisis like the Covid-19 pandemic. This study addresses this gap by investigating the extent to which CGC influence business continuity during the Covid-19 pandemic and whether IT governance moderates the relationship between CGC and business continuity. The study hypothesizes that CGC alone are insufficient to manage business disruptions during crises, and IT governance plays a crucial role in enhancing business efficiency and avoiding interruptions. The research contributes empirically by providing evidence from an emerging economy, assessing IT governance's mediating role, and addressing a significant gap in the existing literature.

The literature review examines existing research on business continuity, crisis management, corporate governance characteristics (CGC), and IT governance. Studies on business continuity show its importance in mitigating risks and maintaining operations during disruptions. Research on crisis management highlights various strategies and frameworks for managing crises. The literature on CGC explores the impact of board characteristics (size, independence, diligence), audit committee effectiveness, and external audit on firm performance and risk management. Research on IT governance focuses on the role of IT strategies and policies in aligning IT with business objectives. However, the literature lacks studies that integrate CGC, IT governance, and BCM in the specific context of the Covid-19 pandemic, especially in emerging economies. This research gap motivated the current study.

This quantitative study used a survey questionnaire distributed to 232 respondents in Jordan, including board members, senior executives, auditors, and IT assistants from various sectors. A snowball sampling technique was employed. The questionnaire used a 5-point Likert scale to measure nine dimensions: board size, board independence, board diligence, audit committee independence, audit committee diligence, board committees, external audit, IT governance, and business continuity management (BCM). Exploratory factor analysis (EFA) using SPSS 23 and confirmatory factor analysis (CFA) using SmartPLS3 were conducted to assess the measurement model's validity and reliability. Structural equation modeling (SEM) with PLS-SEM was then applied to test the hypotheses regarding the direct and moderating effects of the variables. The sample size was determined based on various studies and software calculations to ensure sufficient statistical power. The data was analyzed to examine the impact of CGC on BCM, the impact of CGC on IT governance, and the moderating effect of IT governance on the relationship between CGC and BCM. The study addresses potential issues like missing data and employs appropriate statistical techniques to ensure robustness and validity.

The study's key findings are presented in several stages. Firstly, the analysis of the direct effect revealed that, except for audit committee independence, other CGCs had an insignificant impact on business continuity. However, IT governance had a statistically significant positive effect on business continuity. Secondly, the analysis of the impact of CGC on IT governance showed that board size, board independence, audit committee independence, audit committee diligence, and external audit significantly and positively influenced IT governance. Board diligence and board committees did not have a significant impact. The adjusted R-squared value of 0.88 in this model indicates that CGC explains a substantial portion of IT governance's variability. Thirdly, regarding the moderating effect of IT governance, the results showed that IT governance significantly moderates the relationship between board size, board independence, board diligence, audit committee independence, audit committee diligence, and external audit on business continuity. However, IT governance did not significantly moderate the relationship between board committees and business continuity. Specific findings included a negative moderating effect of board size on the relationship between IT governance and business continuity, while board independence and audit committee characteristics displayed significant positive moderating effects. Statistical significance levels (p-values) are reported throughout for each effect tested.

The findings indicate that while audit committee independence directly contributes to business continuity, IT governance plays a crucial mediating role, amplifying or diminishing the effects of CGC depending on the specific characteristic. The positive moderating effects of board independence and audit committee effectiveness suggest that effective monitoring strengthens IT governance's contribution to business continuity. The negative moderating effect of board size highlights potential challenges of large boards in effectively managing IT governance. The study highlights the importance of integrating IT governance into overall corporate governance to improve business continuity, especially during crises. The findings underscore that efficient IT governance requires active involvement from board members, audit committees, and external auditors, and emphasize the need for board members to enhance their IT expertise.

This study provides valuable insights into the critical role of IT governance in ensuring business continuity during crises. The research emphasizes the need for a holistic approach to corporate governance that integrates IT governance effectively. The results suggest practical implications for board members, policymakers, IT specialists, and researchers. Future research could explore the long-term effects of IT governance on business continuity, compare the findings across different sectors or countries, and investigate the role of specific IT governance frameworks in BCM.

This study has several limitations. First, the sample was limited to Jordanian organizations, reducing the generalizability of the findings. Second, the study focused on a specific set of CGC; future research could broaden the scope to include other governance aspects. Third, the data collection was conducted during the Covid-19 pandemic; a comparative study examining the post-pandemic situation would strengthen the findings. Finally, the use of a survey methodology relies on self-reported data, potentially introducing bias. Future studies could incorporate multiple data sources or methods to address this.