| Peer-Reviewed

Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria

Received: 2 March 2022     Accepted: 21 March 2022     Published: 29 March 2022
Views:       Downloads:
Abstract

Environmental sustainability performance and its disclosure are not company’s primary objectives rather are practices that lift the reputation of company in society. Environmental sustainability disclosure is not mandatory by accounting standards; however, information on environmental sustainability is of interest to various stakeholders for informed decision making. Financial reporting does not provide sufficient information for stakeholders to make an informed decision. It is with a view to addressing this concern that the study investigated the impact of corporate governance on environmental sustainability disclosure of non-financial companies quoted in Nigeria. Ex-post facto research design was adopted for the study. The population was 109 non-financial companies quoted in Nigeria as at 31 December, 2020. Stratified and purposive sampling techniques were used to select a sample of 72 non-financial companies that were in existence for a period of 9 years, 2012 to 2020. Data were extracted from published annual reports of the sampled non-financial companies and validated by certification of external auditors and the Nigerian Stock Exchange. Data were analyzed using descriptive and multiple regression analysis. The study found that the combined effect of corporate governance (CG) had a significant effect on environmental sustainability disclosure (END) (Adj. R2= 0.1783, F(6, 641) = 170.58, ρ = 0.00). The separated effects were varied. Board Independence (BOI), Nomination Committee (NOC), and Sustainability Responsibility Committee (SRC) have a positive and significant effect on END (BOI=0.0031, t-test=5.28, ρ = 0.001; NOC=0.1391, t-test=3.50, ρ = 0.008; SRC=0.6165, t-test=6.68, ρ = 0.000). Risk Committee (RIC) and Remuneration Committee (REC) have a positive and insignificant effect on END (RIC=0.0519, t-test=1.61, ρ = 0.147; REC=0.0083, t-test=0.020, ρ = 0.849) while Board Meetings has a negative and insignificant effect on END (BOM=-0.0016, t-test=-0.27, ρ = 0.792). The study concluded that corporate governance enhanced environmental sustainability disclosure of non-financial companies quoted in Nigeria. The study recommended that management should institute sound corporate governance mechanisms, especially a sustainability responsibility committee to enable improved environmental sustainability practices and their disclosure.

Published in Journal of Finance and Accounting (Volume 10, Issue 2)
DOI 10.11648/j.jfa.20221002.15
Page(s) 121-131
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

Advisory Committees, Corporate Governance, Environmental Sustainability Disclosure, Global Reporting Initiative, Legitimacy Theory

References
[1] AbuRaya, R. K. (2012). The relationship between corporate governance and environmental disclosure: UK evidence, Durham theses, Durham University. Available at Durham E-Theses Online: http://etheses.dur.ac.uk/3456/.
[2] Acar, E., Çalıyurt, K. T., & Zengin-Karaibrahimoglu, Y. (2020). Does ownership type affect environmental disclosure? International Journal of Climate Change Strategies and Management, 13 (2), 120-141.
[3] Adams, C. A. & Roberts, C. B. 1995. Corporate ethics: an issue worthy of report? Accounting Forum 9, 128-142.
[4] Adegbie, F. F., Akintoye, I. R., & Ashaolu, A. O. (2019). Corporate governance and financial stability of Nigeria quoted deposit money banks. International Journal of Business and Management Review, 7 (5), 38-60.
[5] Adegbie, F. F., Akintoye, I. R., & Taiwo, O. J. (2020). Sustainability reporting: Imperative for turnover growth. Asian Journal of Economics, Business and Accounting, 16 (1), 8-18.
[6] Adib, M., & Xianzhi, Z. (2019). Board characteristics and corporate social performance nexus: A multi-theoretical analysis evidence from South Africa. Journal of Business and Management (IOSR-JBM), 21 (1), 24-38.
[7] Aifuwa, H. O. (2020). Sustainability reporting and firm performance in developing climes: A review of literature. Copernican Journal of Finance & Accounting, 9 (1), 9–29.
[8] Alfarisa, P., & Harymawan, I. (2021). Board independence, nomination, and remuneration committee, and compensation in Indonesia. Journal of Accountancy, 25 (1), 34-53.
[9] Al-Hadi, A., Hasan, M. M., & Habib, A. (2016). Risk committee, firm life cycle, and market risk disclosures. Corporate Governance, An International Review, 24 (2), 145-170.
[10] Alhaj, A., & Mansor, N. (2019). Sustainability Disclosure on Environmental Reporting: A Review of Literature in Developing Countries. American Based Research Journal, 8 (1), 1-13.
[11] Ali, M. A., Ahmed, M., & Sattar, A. R. (2019). Profitability as the determinant of soft environmental disclosures. European Online Journal of Natural and Social Sciences, 8 (1), 128-138.
[12] Alsayegh, M. F., Rahman, R. A., & Homayoun, S. (2020). Corporate economic, environmental, and social sustainability performance transformation through ESG disclosure. Sustainability Journal, 12 (9), 1-20.
[13] Ammer, M. A., Aliedan, M. M., & Alyahya, M. A. (2020). Do corporate environmental sustainability practices influence firm value? The role of independent directors: Evidence from Saudi Arabia. Sustainability Journal, 12 (9768), 1-21.
[14] Arena, C., Bozzolan, S., & Michelon, G., (2014). Environmental reporting: Transparency to stakeholders or stakeholder manipulation? An analysis of disclosure tone and the role of the board of directors. Corporate Social Responsibility and Environmental Management, 22 (6), 346–361.
[15] Azzam, M., AlQudah, A., Haija, A. A., & Shakhatreh, M. (2020). The association between sustainability disclosures and the financial performance of Jordanian firms. Cogent Business & Management, 7 (1), 1859437, DOI: 10.1080/23311975.2020.1859437.
[16] Bensaid, A., Ishak, S. B., & Mustapa, I. R. B. (2021). Risk management committee attributes: A review of the literature and future directions. Universal Journal of Accounting and Finance, 9 (3), 388 - 395.
[17] Bhuiyan, M. B. U., Cheema, M. A., & Man, Y. (2021). Risk committee, corporate risk-taking and firm value. Managerial Finance, 47 (3), 285-309.
[18] Borlea, S. N., Achim, M. V., & Mare, C. (2017). Board characteristics and firm performances in emerging economies. Lessons from Romania. Economic Research-Ekonomska Istraživanja, 30 (1), 55-75.
[19] Campbell, D., Craven, B., & Shrives, P. (2003). Voluntary social reporting in three FTSE sectors: A comment on perception and legitimacy. Accounting, Auditing and Accountability Journal, 16 (4), 558-581.
[20] Chen, S., Wang, Y., Albitar, K., & Huang, Z. (2021). Does ownership concentration affect corporate environmental responsibility engagement? The mediating role of corporate leverage. Borsa Istanbul Review, 21 (S1), S13-S24.
[21] Clarke, J., & Gibson-Sweet, M. (1999). The use of corporate social disclosures in the management of reputation and legitimacy: A cross sectoral analysis of UK top 100 Companies. Business Ethics: A European Review, 8 (1), 5-13.
[22] Coffie, W., Aboagye-Otchere, F., & Musah, A. (2018). Corporate social responsibility disclosures (CSRD), corporate governance and the degree of multinational activities: Evidence from a developing economy. Journal of Accounting in Emerging Economies, 8 (1), 106–123.
[23] Deegan, C., & Gordon, B. (1996). A study of the environmental disclosure practices of Australian corporations. Accounting and Business Research, 26 (3), 187-199.
[24] Deegan, C., & Rankin, M. (1996). Do Australian companies report environmental news objectively? An analysis of environmental disclosures by firms prosecuted successfully by the environmental protection authority. Accounting, Auditing, and Accountability Journal, 9 (2), 50-67.
[25] Elaigwu, M., Ayoib, C., & Salau, O. A. (2020). Board governance mechanisms and sustainability reporting quality: A theoretical framework. Cogent Business & Management, 7 (1), 1771075, DOI: 10.1080/23311975.2020.1771075.
[26] Elmagrhi, M., Ntim, C. G., Elamer, A. A., & Zhang, Q. (2018). A study of environmental policies and regulations, governance structures and environmental performance: The role of female directors. Business Strategy and the Environment, 1-29. doi: 10.1002/bse.2250.
[27] Emeka-Nwokeji, N. A., & Osisioma, B. C. (2019). Sustainability disclosures and market value of firms in emerging economy: Evidence from Nigeria. European Journal of Accounting, Auditing and Finance Research, 7 (3), 1-19.
[28] Ezhilarasi, G., & Kabra, K. C. (2017). The impact of corporate governance attributes on environmental disclosures: Evidence from India. Indian Journal of Corporate Governance, 10 (1) 24–43.
[29] Fahad, P., & Rahman, P. M. (2020). Impact of corporate governance on CSR disclosure. International Journal of Disclosure and Governance, 17, 155-167.
[30] Gardazi, S. S. N., Hassan, A. F. S., & Johari, J. B. (2020). Board of directors’ attributes and sustainability performance in the energy industry. Journal of Asian Finance, Economics and Business, 7 (12), 317–328.
[31] Geerts, M., Dooms, M., & Stas, L. (2021). Determinants of sustainability reporting in the present institutional context: The case of Port Managing Bodies. Sustainability Journal, 13, 3148.
[32] Giannarakis, G., Sariannidis, N., & Konteos, G. (2020). The effect of corporate governance characteristics on environmental performance: The case of food and beverage sector. Open Journal of Business and Management, 8, 1988-2005.
[33] Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: A review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing and Accountability Journal, 8 (2), 47-77.
[34] Gray, S., & Roberts, C. (1989). Voluntary information disclosure & the British multinationals. International Pressures for Accounting Change, 116-139.
[35] GRI (1997). Global Reporting Initiative. Retrieved from. https://www.globalreporting. org/information/sustainability-reporting/Pages/default.aspx.
[36] Habbash, M. (2016). Corporate governance and corporate social responsibility disclosure: Evidence from Saudi Arabia. Social Responsibility Journal, 12 (4), 740–754.
[37] Hahn, R., & Kühnen, M. (2013). Determinants of sustainability reporting: A review of results, trends, theory, and opportunities in an expanding field of research. Journal of Cleaner Production, 59, 5–21.
[38] Haque, F. (2017). The effects of board characteristics and sustainable compensation policy on carbon performance of UK firms. The British Accounting Review, 49 (3), 347–364.
[39] Haskin, D. L. & Burke, M. M (2016). Incorporating sustainability issues into the financial accounting curriculum. American Journal of Business Education, 9 (2), 49-56.
[40] Hoang, T. H. V., Przychodzen, W., Przychodzen, J., & Segbotangni, E. A. (2021). Environmental transparency and performance: Does the corporate governance matter? Environmental and Sustainability Indicators 10 (100123), 1-11.
[41] Hogner, R. H. (1982). Corporate social reporting: Eight decades of development at US steel. Research in Corporate Performance and Policy, 4, 243-250.
[42] Hurst, J. W. (1970). The legitimacy of the business corporation in the law of the United States 1780-1970. The University Press of Virginia, Charlottesville.
[43] Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate governance and sustainability performance: Analysis of triple bottom line performance. Journal of Business Ethics, 149 (2), 411–432.
[44] Iredele, O. O., & Moloi, T. (2020). Corporate environmental disclosure in the integrated reporting regime: The case of listed mining companies in South Africa. Journal of Economic and Financial Sciences, 13 (1), 1-11.
[45] James, G., Witten, D., Hastie, T., & Tibshirani, R. (2017). An introduction to statistical learning: With applications in R (2nd ed.). New York: Springer Science and Business Media.
[46] Kaur, P., Stoltzfus, J., & Yellapu, V. (2018). Descriptive statistics. International Journal of Academic Medicine, 4 (1), 60-63.
[47] Kilincarslan, E., Elmagrhi, M. H., & Li, Z. (2020). Impact of governance structures on environmental disclosures in the Middle East and Africa. Corporate Governance, 20 (4), 739-763.
[48] Kuang-Hua, H., Sin-Jin, L., & Ming-Fu, H. (2018). A fusion approach for exploring the key factors of corporate governance on corporate social responsibility performance. Sustainability Journal, MPDI, 10 (1582), 1-18.
[49] Liao, C., San, Z., Tsang, A., & Yu, L. (2021). Board reforms around the world: The effect on corporate social responsibility. Corporate Governance International Review, 29, 496-523.
[50] Li, D., Lin, A., & Zhang, L. (2019). Relationship between chief executive officer’s characteristics and corporate environmental information disclosure in Thailand. Frontiers of Engineering Management, 6, 564–574.
[51] Lindblom, C. K. (1994). The implications of organisational legitimacy for corporate social performance and disclosure. Conference Paper, Critical Perspectives on Accounting Conference, New York.
[52] Mahmood, Z., Kouser, R., Ali, W., Ahmad, Z., & Salman, T. (2018). Does corporate governance affect sustainability disclosure? A mixed methods study. Sustainability Journal, 10 (207), 1-20.
[53] Makhlouf, M. H., Binti-Laili, N. H., & Ali, M. Y. (2014). Board of directors’ characteristics and firm performances among Jordanian firms, proposing conceptual framework. International Journal of Technical Research and Applications, 2, 18–23.
[54] Manescu, C., & Starica, C. (2008). The relevance of Corporate Social Responsibility criteria to explaining firm profitability: A case study of the publishers of the Dow Jones Sustainability Indexes1. Retrieved from: https://www.academia.edu/528706/The_relevance_of_Corporate_Social_Responsibility_criteria_to_explaining_firm_profitability_A_case_study_of
_the_publishers_of_the_Dow_Jones_Sustainability_Indexes1
[55] Mukherjee, T., & Sen, S. S. (2019). Impact of corporate governance on corporate sustainable growth. International Research Journal of Business Studies, 12 (2), 167-184.
[56] Muntaha, M. R., & Haryono, S. (2021). Pengaruh corporate governance, sustainability committee, dan degree of multinational activity terhadap CSR Disclosure. Journal of Economics and Business, 16 (1), 63-75.
[57] Ndzi, E. G. (2019). Executive remuneration: The power and dominance of human greed. Journal of Financial Crime, 26 (4), 978–992.
[58] Nigerian Code of Corporate Governance (2018). https://nambnigeria.org/Nig_Code_of_Corp._Governance_2018.pdf
[59] Nour, A. I., Sharabati, A. A. A., & Hammad, K. M. (2020). Corporate governance and corporate social responsibility disclosure. International Journal of Sustainable Entrepreneurship and Corporate Social Responsibility, 5 (1), 20-41.
[60] Ntim, C. G., Soobaroyen, T., & Broad, M. J. (2017). Governance structures, voluntary disclosures, and public accountability: The case of UK higher education institutions. Accounting, Auditing & Accountability Journal, 30 (1), 65-118.
[61] Nwachukwu, J. N., Ogundiwin, A. O., & Nwaobia, A. N. (2015). Anthology of theories and their applications in social and management sciences (1st ed.). Lagos, Nigeria: Jamiro Press Link.
[62] Nwobu, O. A., Owolabi, A. A., & Iyoha, F. O. (2017). Sustainability reporting in financial institutions: A study of the Nigerian banking sector. Journal of Internet Banking and Commerce, 22 (8), 1-15.
[63] O’Dwyer, B., Owen, D., & Unerman, J. (2011). Seeking legitimacy for new assurance forms: The case of assurance on sustainability reporting. Accounting, Organisations and Society, 36 (1), 31 – 52.
[64] O'Dwyer, B. (2001). Corporate environmental reporting. Accountancy Ireland, 33 (2), 18-19.
[65] Odoemelam, N., & Okafor, R. G. (2018). The influence of corporate governance on environmental disclosure of listed non-financial firms in Nigeria. Indonesian Journal of Sustainability Accounting and Management, 2 (1), 25–49.
[66] Okegbe, T. O., & Egbunike, F. C. (2016). Corporate social responsibility and financial performance of selected quoted companies in Nigeria. NG-Journal of Social Development, 5 (4), 168-189.
[67] Olayinka, O. M., & Owolabi, S. A. (2021). Corporate governance and environmental sustainability reporting: The Nigerian perspective. International Journal of Scientific and Research Publications, 11 (4), 487-497.
[68] Oprean-Stan, C., Oncioiu, I., Iuga, I. C., & Stan, S. (2020). Impact of sustainability reporting and inadequate management of ESG factors on corporate performance and sustainable growth. Sustainability Journal, 12 (853), 1-31.
[69] Owolabi, S. A., & Babarinde, T. A. (2020). Effect of corporate governance on audit quality in Nigerian banks. International Journal of Multidisciplinary and Current Educational Research (IJMCER), 2 (5), 290-296.
[70] Painter-Morland, M. (2006). Triple bottom-line reporting as social grammar: Integrating corporate social responsibility and corporate codes of conduct. Business Ethics: A European Review, 15 (4), 352-364.
[71] Patten, D. M. (1992). Intra-industry environmental disclosures in response to the Alaskan oil spill: A note on legitimacy theory. Accounting, Organizations and Society, 17 (5), 471-475.
[72] Petra F. A. (2010). Sustainability reporting in a global context: What are the characteristics of corporations that provide high quality sustainability reports: An empirical analysis. International Business & Economics Research Journal, 9 (1), 19-30.
[73] Rafique, M. A., Malik, Q. A., Waheed, A., & Khan, N. U. (2017). Corporate governance and environmental reporting in Pakistan. Pakistan Administrative Review, 1 (2), 103-114.
[74] Rao, K., & Tilt, C. (2016). Board composition and corporate social responsibility: The role of diversity, gender, strategy, and decision making. Journal of Business Ethics, 138 (2), 327-347.
[75] Rizk, R. (2006). Corporate social and environmental disclosure practices: An international comparison of UK, Indian and Egyptian corporations. PhD thesis, Durham University.
[76] Salvioni, D. M., & Bosetti, L. (2014). Sustainable development and corporate communication in global markets. Symphonya Emerging Issues in Management, 1, 1-19.
[77] Shahbaz, M., Karaman, A. S., Kilic, M., & Uyar, A. (2020). Board attributes, CSR engagement, and corporate performance: What is the nexus in the energy sector? Energy Policy, 143, 111582. https://doi.org/10.1016/j.enpol.2020.111582 https://doi.org/10.1016/j.enpol.2020.111582
[78] Siminica, M., Cristea, M., Sichigea, M., Noja, G. G., & Anghel, I. (2019). Well-governed sustainability and financial performance: A new integrative approach. Sustainability Journal, 11 (4562), 1-21.
[79] Stolowy, H. & Paugam, L. (2018). The expansion of non-financial reporting: An exploratory study. Accounting and Business Research, 48 (5), 525-548.
[80] The Nigerian Stock Exchange (2016). Sustainability Disclosure guideline. Retrieved from https://www.incsr.org/wp-content/uploads/2018/12/Sustainability-Disclosure-Guidelines.pdf
[81] The Nigerian Stock Exchange (2016). Enhancing trust in the capital market, NSE disclosure guidelines. Retrieved from https://ngxgroup.com/wp-content/uploads/2020/12/Sustainability-Reporting-Seminar-NSE-Disclosure-Guidelines.pdf
[82] Tjahjadi, B., Soewarno, N., & Mustikaningtiyas, F. (2021). Good corporate governance and corporate sustainability performance in Indonesia: A triple bottom line approach. Heliyon 7, 1-11.
[83] Trireksani, T., & Djajadikerta, H. G. (2016). Corporate governance and environmental disclosure in the Indonesian mining industry. Australasian Accounting, Business and Finance Journal, 10 (1), 18-28.
[84] Umar, M. M., Mustapha, L. O., & Yahaya, O. A. (2021). Sustainability Reporting and Financial Performance of Listed Consumer Goods Firms in Nigeria. Journal of Advance Research in Business Management and Accounting, 7 (3), 21-32.
[85] UN (2015). The millennium development goals report. Time for global action for people and planet. United Nations, New York.
[86] Watson, A., Shrives, P., & Marston, C. (2002). Voluntary disclosure of accounting ratios in the UK. The British Accounting Review, 34 (4), 289-313.
[87] Wilmshurst, T. D., & Frost, G. R. (2000). Corporate environmental reporting: A test of legitimacy theory. Accounting, Auditing and Accountability Journal, 13 (1), 10-26.
Cite This Article
  • APA Style

    Ponnle Josiah Oyekale, Samuel Adebayo Olaoye, Appolos Nwabuisi Nwaobia. (2022). Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria. Journal of Finance and Accounting, 10(2), 121-131. https://doi.org/10.11648/j.jfa.20221002.15

    Copy | Download

    ACS Style

    Ponnle Josiah Oyekale; Samuel Adebayo Olaoye; Appolos Nwabuisi Nwaobia. Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria. J. Finance Account. 2022, 10(2), 121-131. doi: 10.11648/j.jfa.20221002.15

    Copy | Download

    AMA Style

    Ponnle Josiah Oyekale, Samuel Adebayo Olaoye, Appolos Nwabuisi Nwaobia. Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria. J Finance Account. 2022;10(2):121-131. doi: 10.11648/j.jfa.20221002.15

    Copy | Download

  • @article{10.11648/j.jfa.20221002.15,
      author = {Ponnle Josiah Oyekale and Samuel Adebayo Olaoye and Appolos Nwabuisi Nwaobia},
      title = {Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria},
      journal = {Journal of Finance and Accounting},
      volume = {10},
      number = {2},
      pages = {121-131},
      doi = {10.11648/j.jfa.20221002.15},
      url = {https://doi.org/10.11648/j.jfa.20221002.15},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20221002.15},
      abstract = {Environmental sustainability performance and its disclosure are not company’s primary objectives rather are practices that lift the reputation of company in society. Environmental sustainability disclosure is not mandatory by accounting standards; however, information on environmental sustainability is of interest to various stakeholders for informed decision making. Financial reporting does not provide sufficient information for stakeholders to make an informed decision. It is with a view to addressing this concern that the study investigated the impact of corporate governance on environmental sustainability disclosure of non-financial companies quoted in Nigeria. Ex-post facto research design was adopted for the study. The population was 109 non-financial companies quoted in Nigeria as at 31 December, 2020. Stratified and purposive sampling techniques were used to select a sample of 72 non-financial companies that were in existence for a period of 9 years, 2012 to 2020. Data were extracted from published annual reports of the sampled non-financial companies and validated by certification of external auditors and the Nigerian Stock Exchange. Data were analyzed using descriptive and multiple regression analysis. The study found that the combined effect of corporate governance (CG) had a significant effect on environmental sustainability disclosure (END) (Adj. R2= 0.1783, F(6, 641) = 170.58, ρ = 0.00). The separated effects were varied. Board Independence (BOI), Nomination Committee (NOC), and Sustainability Responsibility Committee (SRC) have a positive and significant effect on END (BOI=0.0031, t-test=5.28, ρ = 0.001; NOC=0.1391, t-test=3.50, ρ = 0.008; SRC=0.6165, t-test=6.68, ρ = 0.000). Risk Committee (RIC) and Remuneration Committee (REC) have a positive and insignificant effect on END (RIC=0.0519, t-test=1.61, ρ = 0.147; REC=0.0083, t-test=0.020, ρ = 0.849) while Board Meetings has a negative and insignificant effect on END (BOM=-0.0016, t-test=-0.27, ρ = 0.792). The study concluded that corporate governance enhanced environmental sustainability disclosure of non-financial companies quoted in Nigeria. The study recommended that management should institute sound corporate governance mechanisms, especially a sustainability responsibility committee to enable improved environmental sustainability practices and their disclosure.},
     year = {2022}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria
    AU  - Ponnle Josiah Oyekale
    AU  - Samuel Adebayo Olaoye
    AU  - Appolos Nwabuisi Nwaobia
    Y1  - 2022/03/29
    PY  - 2022
    N1  - https://doi.org/10.11648/j.jfa.20221002.15
    DO  - 10.11648/j.jfa.20221002.15
    T2  - Journal of Finance and Accounting
    JF  - Journal of Finance and Accounting
    JO  - Journal of Finance and Accounting
    SP  - 121
    EP  - 131
    PB  - Science Publishing Group
    SN  - 2330-7323
    UR  - https://doi.org/10.11648/j.jfa.20221002.15
    AB  - Environmental sustainability performance and its disclosure are not company’s primary objectives rather are practices that lift the reputation of company in society. Environmental sustainability disclosure is not mandatory by accounting standards; however, information on environmental sustainability is of interest to various stakeholders for informed decision making. Financial reporting does not provide sufficient information for stakeholders to make an informed decision. It is with a view to addressing this concern that the study investigated the impact of corporate governance on environmental sustainability disclosure of non-financial companies quoted in Nigeria. Ex-post facto research design was adopted for the study. The population was 109 non-financial companies quoted in Nigeria as at 31 December, 2020. Stratified and purposive sampling techniques were used to select a sample of 72 non-financial companies that were in existence for a period of 9 years, 2012 to 2020. Data were extracted from published annual reports of the sampled non-financial companies and validated by certification of external auditors and the Nigerian Stock Exchange. Data were analyzed using descriptive and multiple regression analysis. The study found that the combined effect of corporate governance (CG) had a significant effect on environmental sustainability disclosure (END) (Adj. R2= 0.1783, F(6, 641) = 170.58, ρ = 0.00). The separated effects were varied. Board Independence (BOI), Nomination Committee (NOC), and Sustainability Responsibility Committee (SRC) have a positive and significant effect on END (BOI=0.0031, t-test=5.28, ρ = 0.001; NOC=0.1391, t-test=3.50, ρ = 0.008; SRC=0.6165, t-test=6.68, ρ = 0.000). Risk Committee (RIC) and Remuneration Committee (REC) have a positive and insignificant effect on END (RIC=0.0519, t-test=1.61, ρ = 0.147; REC=0.0083, t-test=0.020, ρ = 0.849) while Board Meetings has a negative and insignificant effect on END (BOM=-0.0016, t-test=-0.27, ρ = 0.792). The study concluded that corporate governance enhanced environmental sustainability disclosure of non-financial companies quoted in Nigeria. The study recommended that management should institute sound corporate governance mechanisms, especially a sustainability responsibility committee to enable improved environmental sustainability practices and their disclosure.
    VL  - 10
    IS  - 2
    ER  - 

    Copy | Download

Author Information
  • Department of Accounting, Babcock University, Ilishan-Remo, Nigeria

  • Department of Accounting, Babcock University, Ilishan-Remo, Nigeria

  • Department of Accounting, Babcock University, Ilishan-Remo, Nigeria

  • Sections