Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Impact of Corporate Governance Mechanisms on Social and Environmental Disclosure Quality of Listed Non-Service Companies in Nigeria

Bamenda Philip Chinda, Ishaya Luka Chechet PhD, Mohammed Habibu Sabari PhD

Abstract

In the contemporary corporate landscape of Nigeria, social and environmental disclosure quality has emerged as a prominent concern within the realm of corporate disclosure. This study examined the impact of corporate governance mechanisms on the social and environmental disclosure quality of listed non-service companies in Nigeria. Utilising secondary data extracted from the annual reports of 51 non-service companies (out of 74) over a five-year period from 2018 to 2022, sourced from the Nigerian Exchange Group and companies websites, the study employs generalised least square analysis to achieve its objectives. The findings reveal a significant positive relationship between board gender, board size, board meetings, audit firm choice, and social and environmental disclosure quality. In practical terms, the study has profound implications for promoting board gender diversity, regulatory reforms, aligning with stakeholder expectations, enhancing governance practices, improving information management, fostering strategic decision-making, building stakeholders' trust, and fortifying crisis response mechanisms. Theoretical implications involve integrating stakeholder, legitimacy, and agency theories, while methodologically, the research recommends that the Financial Reporting Council of Nigeria should consider improving Principle 21, addressing Social and Environmental Disclosure issues, aligning it with international best practices. Ultimately, this study contributes valuable insights for stakeholders committed to advancing corporate governance and fostering improved social and environmental disclosure practices within Nigerian non-service companies.

Keywords

Social and environmental disclosure qualityCorporate governance mechanisms

References

Abdu, A., Yunusa, N., & Busari, K. (2020). Board make-ups and earnings management of listed deposit money banks in Nigeria. International Journal of Intellectual Discourse, 3(2), 1–14. Abu Qa’dan, M. B., & Suwaidan, M. S. (2019). Board composition, ownership structure and corporate social responsibility disclosure: the case of Jordan. Social Responsibility Journal, 15(1), 28–46. https://doi.org/10.1108/SRJ-11-2017-0225 Anazonwu, H. O., Egbunike, F. C., & Gunardi, A. (2018). Corporate board diversity and sustainability reporting?: A study of selected listed manufacturing firms in Nigeria. Indonesian Journal of Sustainability Accounting and Management, 2(1), 65–78. https://doi.org/10.28992/JAFMam.v2i1.52 Bani-khalid, T., Kouhy, R., & Hassan, A. (2017). The impact of corporate characteristics on social and environmental disclosure (csed): The case of Jordan. Journal of Accounting and Auditing: Research & Practice, 2017, 1–26. http://www.ibimapublishing.com/journals/JAARP/jaarp.html Chams, N., & García-Blandón, J. (2019). Sustainable or not sustainable? The role of the board of directors. Journal of Cleaner Production, 226, 1067–1081. https://doi.org/10.1016/j.jclepro.2019.04.118 Emmanuel, O., Uwuigbe, U., Teddy, O., Tolulope, I., & Eyitomi, Gbenedio, A. (2018). Corporate diversity and corporate social environmental disclosure of listed manufacturing companies in Nigeria. Problems and Perspectives in Management, 16(3), 229–244. Eriabie, S., & Odia, J. (2016). The influence corporate governance attributes on corporate social and environmental disclosure quality in Nigeria. ESUT Journal of Accountancy, 7(1), 1–20. Hassan, A., Mohammed, S. D., & Bala, A. J. (2020). The determinants of corporate social and environmental disclosure in the Nigerian oil and gas industry?: An empirical investigation. International Journal of Auditing and Accounting Studies, 2(2), 123–153. Hu, M., & Loh, L. (2018). Board governance and sustainability disclosure: A cross-sectional study of Singapore-listed companies. Sustainability (Switzerland), 10(7), 1–14. https://doi.org/10.3390/su10072578 Issa, A. I. F. (2017). The factors influencing corporate social responsibility disclosure in the kingdom of Saudi Arabia. Australian Journal of Basic and Applied Sciences, 11(10), 1–19. Jizi, M. I., & Dah, M. A. (2018). Board independence and the efficacy of social reporting. Journal of International Accounting Research, 17(1), 25–45. https://doi.org/10.2308/jiar-51952 Majumder, M. T. H., Akter, A., & Li, X. (2017). Corporate governance and corporate social disclosures: A meta-analytical review. International Journal of Accounting and Information Management, 25(4), 434–458. https://doi.org/10.1108/IJAIM-01-2017-0005 Moruff, S. A., Tahir, M. D., Ado, G., & Mamman, S. (2021). Effect of board characteristics on social and environmental disclosure of listed environmental sensisitve firms in Nigeria. Gusau Journal of Accounting and Finance, 2(3), 1–16. Nurulyasmin, B. A., Afzalur, J. R., & Jeff, G. (2017). Board meeting frequency and corporate social responsibilty reporting: evidence from Malaysia. Corporate Board: Role, Duties & Composition., 13(1), 87–99. https://doi.org/10.22495/cbv13i1c1art3 Orazalin, N. (2019). Corporate governance and corporate social responsibility (CSR) disclosure in an emerging economy: evidence from commercial banks of Kazakhstan. The International Journal of Business in Society, 19(3), 490–507. https://doi.org/10.1108/CG-09-2018-0290 Ramadhini, A., Adhariani, D., & Djakman, C. D. (2020). The effects of external stakeholder pressure on CSR disclosure?: Evidence from Indonesia. DLSU Business & Economics Review, 29(2), 29–39. Shuaibu, K. (2020). Firm characteristics and environmental disclosure quality of listed cement companies in Nigeria. African Scholar Journal of Mgt. Science and Entrepreneurship (JMSE- 7, 18(7), 105–118. Welbeck, E. E., Owusu, G. M. Y., Bekoe, R. A., & Kusi, J. A. (2017). Determinants of environmental disclosures of listed firms in Ghana. International Journal of Corporate Social Responsibility, 2(1), 1–12. https://doi.org/10.1186/s40991-017-0023-y Younas, Z. I., Saleh, A., & Abdulaziz, M. (2021). Environmental and social concerns of stakeholders and corporate governance in Germany. Theoretical Economics Letters, 11, 881– https://doi.org/10.4236/tel.2021.115056 Yunusa, N. (2017). Corporate governance mechanisms in social and environmental disclosure: The moderating role of non-executive directors’ ownership in Nigeria. Universiti Utara Malaysia.

More Articles from JOURNAL OF ACCOUNTING AND FINANCIAL MANAGEMENT

Cashflow Management and the Performance of Commercial Banks in Nigeria

Author: Jeffrey Ayas Iyakonbogha, Clement E. Ozele

The Nigerian Code of Corporate Governance and Financial Performance of Deposit Money Banks in Nigeria

Author: i, Eneaniofu Daniel Mmaduakonam, ii, Azolike Nkiru Nkechi, iii, Emeter Patrick Okechukwu, iv, Okwor Emmanuel Ejimnkonye