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Diversity-of-Board and Environmental Reporting of Listed Manufacturing Companies in Nigeria: The Moderating Effect of Audit Committee

Received: 24 November 2021     Accepted: 29 December 2021     Published: 8 January 2022
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Abstract

The 2018 Nigerian Code of Corporate Governance demands responsible behaviour and environmental sensitivity from all companies in Nigeria. However, the extent of environmental reporting amongst firms in Nigeria is still low and not a listing requirement despite the trend of disclosure practices by firms around the world. As a step towards addressing this shortcoming, the objective of this paper is to examine the effect of diversity-of-board on environmental reporting of listed manufacturing companies in Nigeria, and further explores the moderating effect of audit committee. Board size, Board independence and directors share ownership was used as a composite index to proxy for Diversity-of-board and Environmental reporting was graded using ISO14031 index. The study has a population of 61 listed manufacturing firms and a sample size of 36 firms which was arrived at using stratified sampling criteria. Through content analysis, secondary data was collected from the annual report of the sampled companies from the period 2002 to 2019. Using descriptive statistics and linear multiple regression, findings from this study revealed that before moderation, diversity-of-board has no significant effect on environmental reporting (t= -1.80, P˂ 0.001). However, the study found that audit committee significantly moderates the effect of diversity-of-board on environmental reporting (t= -3.67, P˂ 0.001). Since the moderating effect of audit committee on diversity-of-board and environmental reporting is negative the study concludes that both diversity-of-board and audit committee do not strengthen environmental reporting. The study recommended that the financial reporting council of Nigeria should include environmental committee as one of the mandatory committee in the code of corporate governance who will specifically handle environmental issues.

Published in Journal of Finance and Accounting (Volume 10, Issue 1)
DOI 10.11648/j.jfa.20221001.11
Page(s) 1-18
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Board Diversity, Diversity-of-Board, Structural Diversity, Environmental Reporting, Nigeria

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Cite This Article
  • APA Style

    Salvation Joshua Selven, Nyor Terzungwe, Agbi Eniola Samuel, Joshua Gambo Samuel, Adzor Ibiamke, et al. (2022). Diversity-of-Board and Environmental Reporting of Listed Manufacturing Companies in Nigeria: The Moderating Effect of Audit Committee. Journal of Finance and Accounting, 10(1), 1-18. https://doi.org/10.11648/j.jfa.20221001.11

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    ACS Style

    Salvation Joshua Selven; Nyor Terzungwe; Agbi Eniola Samuel; Joshua Gambo Samuel; Adzor Ibiamke, et al. Diversity-of-Board and Environmental Reporting of Listed Manufacturing Companies in Nigeria: The Moderating Effect of Audit Committee. J. Finance Account. 2022, 10(1), 1-18. doi: 10.11648/j.jfa.20221001.11

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    AMA Style

    Salvation Joshua Selven, Nyor Terzungwe, Agbi Eniola Samuel, Joshua Gambo Samuel, Adzor Ibiamke, et al. Diversity-of-Board and Environmental Reporting of Listed Manufacturing Companies in Nigeria: The Moderating Effect of Audit Committee. J Finance Account. 2022;10(1):1-18. doi: 10.11648/j.jfa.20221001.11

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  • @article{10.11648/j.jfa.20221001.11,
      author = {Salvation Joshua Selven and Nyor Terzungwe and Agbi Eniola Samuel and Joshua Gambo Samuel and Adzor Ibiamke and Mustapha Lateef and Danazumi Elisha Bako},
      title = {Diversity-of-Board and Environmental Reporting of Listed Manufacturing Companies in Nigeria: The Moderating Effect of Audit Committee},
      journal = {Journal of Finance and Accounting},
      volume = {10},
      number = {1},
      pages = {1-18},
      doi = {10.11648/j.jfa.20221001.11},
      url = {https://doi.org/10.11648/j.jfa.20221001.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20221001.11},
      abstract = {The 2018 Nigerian Code of Corporate Governance demands responsible behaviour and environmental sensitivity from all companies in Nigeria. However, the extent of environmental reporting amongst firms in Nigeria is still low and not a listing requirement despite the trend of disclosure practices by firms around the world. As a step towards addressing this shortcoming, the objective of this paper is to examine the effect of diversity-of-board on environmental reporting of listed manufacturing companies in Nigeria, and further explores the moderating effect of audit committee. Board size, Board independence and directors share ownership was used as a composite index to proxy for Diversity-of-board and Environmental reporting was graded using ISO14031 index. The study has a population of 61 listed manufacturing firms and a sample size of 36 firms which was arrived at using stratified sampling criteria. Through content analysis, secondary data was collected from the annual report of the sampled companies from the period 2002 to 2019. Using descriptive statistics and linear multiple regression, findings from this study revealed that before moderation, diversity-of-board has no significant effect on environmental reporting (t= -1.80, P˂ 0.001). However, the study found that audit committee significantly moderates the effect of diversity-of-board on environmental reporting (t= -3.67, P˂ 0.001). Since the moderating effect of audit committee on diversity-of-board and environmental reporting is negative the study concludes that both diversity-of-board and audit committee do not strengthen environmental reporting. The study recommended that the financial reporting council of Nigeria should include environmental committee as one of the mandatory committee in the code of corporate governance who will specifically handle environmental issues.},
     year = {2022}
    }
    

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  • TY  - JOUR
    T1  - Diversity-of-Board and Environmental Reporting of Listed Manufacturing Companies in Nigeria: The Moderating Effect of Audit Committee
    AU  - Salvation Joshua Selven
    AU  - Nyor Terzungwe
    AU  - Agbi Eniola Samuel
    AU  - Joshua Gambo Samuel
    AU  - Adzor Ibiamke
    AU  - Mustapha Lateef
    AU  - Danazumi Elisha Bako
    Y1  - 2022/01/08
    PY  - 2022
    N1  - https://doi.org/10.11648/j.jfa.20221001.11
    DO  - 10.11648/j.jfa.20221001.11
    T2  - Journal of Finance and Accounting
    JF  - Journal of Finance and Accounting
    JO  - Journal of Finance and Accounting
    SP  - 1
    EP  - 18
    PB  - Science Publishing Group
    SN  - 2330-7323
    UR  - https://doi.org/10.11648/j.jfa.20221001.11
    AB  - The 2018 Nigerian Code of Corporate Governance demands responsible behaviour and environmental sensitivity from all companies in Nigeria. However, the extent of environmental reporting amongst firms in Nigeria is still low and not a listing requirement despite the trend of disclosure practices by firms around the world. As a step towards addressing this shortcoming, the objective of this paper is to examine the effect of diversity-of-board on environmental reporting of listed manufacturing companies in Nigeria, and further explores the moderating effect of audit committee. Board size, Board independence and directors share ownership was used as a composite index to proxy for Diversity-of-board and Environmental reporting was graded using ISO14031 index. The study has a population of 61 listed manufacturing firms and a sample size of 36 firms which was arrived at using stratified sampling criteria. Through content analysis, secondary data was collected from the annual report of the sampled companies from the period 2002 to 2019. Using descriptive statistics and linear multiple regression, findings from this study revealed that before moderation, diversity-of-board has no significant effect on environmental reporting (t= -1.80, P˂ 0.001). However, the study found that audit committee significantly moderates the effect of diversity-of-board on environmental reporting (t= -3.67, P˂ 0.001). Since the moderating effect of audit committee on diversity-of-board and environmental reporting is negative the study concludes that both diversity-of-board and audit committee do not strengthen environmental reporting. The study recommended that the financial reporting council of Nigeria should include environmental committee as one of the mandatory committee in the code of corporate governance who will specifically handle environmental issues.
    VL  - 10
    IS  - 1
    ER  - 

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Author Information
  • Department of Accounting, Faculty of Management Sciences, Plateau State University, Bokkos, Nigeria

  • Department of Accounting, Faculty of Management Sciences, Nigerian Defence Academy, Kaduna, Nigeria

  • Department of Accounting, Faculty of Management Sciences, Nigerian Defence Academy, Kaduna, Nigeria

  • Department of Accounting, Faculty of Management Sciences, Nigerian Defence Academy, Kaduna, Nigeria

  • Department of Accounting, Faculty of Management Sciences, Nigerian Defence Academy, Kaduna, Nigeria

  • Department of Accounting, Faculty of Management Sciences, Nigerian Defence Academy, Kaduna, Nigeria

  • Department of Accounting, Faculty of Management Sciences, Plateau State University, Bokkos, Nigeria

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