Abstract
This study investigates the influence of audit committee characteristics on the sustainability disclosure among the Nigerian listed banks. Using the Fixed Effect regression estimator of panel data for ten (10) listed banks in Nigeria over the period of 2014–2016, the result shows that the influence of audit committee independence and gender diversity of audit committee are significantly positive on the sustainability disclosure. However, the audit committee magnitude has a negative and significant influence on the sustainability disclosure. This paper is unique as we consider the importance of the gender diversity of the committee given its relative contribution to sustainability reporting quality. This study tends to provide insights on sustainability reporting and assist stakeholders in emphasizing on the importance of sustainability disclosure through the audit committee oversight.
Highlights
Beyond the financial disclosures, the stakeholders persist to demand accountability and transparency of nonfinancial disclosures as regards the firms’ sustainability performance
This study, intends to examine if there is any relationship between audit committee characteristics, bank concentration and sustainability disclosure using the independence of audit committee, Audit Committee engagement, the committee magnitude and the gender diversity of the committee
In the case of audit committee characteristics and bank concentration, we examine four proxies to capture the audit committee characteristics such as the Audit Committee Magnitude (ASM); level of Audit Committee Engagement (ACE); Audit Committee Gender (AGR); and Audit Committee Independence (ACI) while following Grace et al (2014) we control for the weight of the bank magnitude using the square root of the total asset in which we assume that the more a bank is concentrated, the greater its level of sustainability endeavors
Summary
The stakeholders persist to demand accountability and transparency of nonfinancial disclosures as regards the firms’ sustainability performance. This study contributes to the emerging studies on sustainability performance by exploring the influence of audit committee characteristics. This study first extends the prior studies by examining the effect of audit committees on sustainability quality thereby contributing to the limited literature on the subject-matter in Nigeria context. This study tends to help the practitioners to reprioritize the necessity for sustainability processes by providing insights into the roles of the audit committee. In furtherance of achieving global relevance in emerging countries, this study will help the policymakers in adopting sustainability reporting.
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