CORPORATE GOVERNANCE AND SUSTAINABILITY REPORTING OF LISTED FIRMS IN NIGERIA

Abstract

Organizations are charged with the responsibility of providing relevant information on the operation of their business, but as the traditional financial reporting is deficient in total reporting arose the need for sustainability reporting. Hence, this study investigates the effect of corporate governance mechanisms on sustainability reporting among listed firms in Nigeria. The specific objectives are to: (i) examine the influence of board diversity on sustainability reporting; (ii) evaluate the impact of board size on sustainability disclosure; (iii) determine the effect of board independence on the extent of sustainability practices and (iv) assess the influence of audit committee composition on Environmental, Social, Governance (ESG) reporting; and examine the collective role of corporate governance mechanisms in enhancing sustainability disclosure. The study adopted an ex- post facto research design, and secondary data were collected from 50 listed firms that provide non-financial services across various sectors in the Nigerian Exchange Group (NGX) over a ten-year period (2015–2024). Data were analysed using panel regression analysis. The findings reveal that board diversity significantly improves sustainability reporting, board size positively influences disclosure practices, and board independence contributes meaningfully to transparency. Similarly, audit committee composition was found to significantly enhance ESG disclosures. The study concludes that effective corporate governance serves as a catalyst for improved sustainability disclosure of Nigerian firms. It recommends a gender diverse board, well experience independent directors, separation of chairman role from CEO to strengthen the quality of sustainability reporting. Stakeholder engagement and employee training for effective understanding and implementation of sustainability reporting.