Corporate Board Diversity and Sustainability Reporting: A Study of Selected Listed Manufacturing Firms in Nigeria

Helen Obiageli Anazonwu,Francis Chinedu Egbunike,Ardi Gunardi

doi:10.28992/ijsam.v2i1.52

Abstract

The objective of the study is to ascertain the influence of corporate board diversity on sustainability reporting on a sample of quoted manufacturing firms in Nigeria. The study adopts a panel research design. The population of the study comprised quoted manufacturing companies on the Nigerian Stock Exchange. This was restricted to companies classified under conglomerates, consumer goods, and, industrial goods sector. The study used secondary data, extracted from the annual reports of the studied manufacturing companies. Fixed effects panel regression analysis was used to test the hypotheses. The dependent variable sustainability reporting was measured using an Economic, Social, and Governance (ESG) index, the independent variables were board member nationality, proportion of women directors, proportion of non-executive directors, and multiple directorships. The results show no significant positive influence of board member nationality, while proportion of women directors, proportion of non-executive directors, and multiple directorships were significant. The study recommends among others, the adoption of NSE Sustainability Disclosure Guidelines for a unified integrated reporting framework for Nigerian firms, secondly, a heterogeneous board composition, which can leverage on the diverse set of skills of board members.

Highlights

It is the responsibility of a company’s board of directors to “oversee the actions and decisions” of management (Rupley et al, 2012)
The correlation matrix of the variables shows a positive correlation between Percentage of Women Directors (PWD), Percentage of NonExecutive Directors (PNED) and MD with Size, but a negative correlation of Board Member Nationality (BMN) with Size
The bane of the study is to ascertain the influence of corporate board diversity on integrated sustainability reporting by manufacturing firms in Nigeria

Summary

Introduction

It is the responsibility of a company’s board of directors to “oversee the actions and decisions” of management (Rupley et al, 2012). They are the most influential decision-making unit of a corporation (Leung, 2015). There responsibilities span from making key financial and strategic decisions, such as approving changes in capital structure/mergers and acquisitions, to the difficult task of choosing the company’s top executive leadership (Ferreira, 2011). Scholars have suggested for board diversity as one of the ways to enhance corporate governance (Leung, 2015). Some scholars refer to board diversity as a demographic phenomenon entailing age, gender, and ethnicity, while others refer to board diversity as a structural phenomenon comprising CEO duality, board independence, and director ownership (Hoang et al, 2016)

Objectives

Methods

Results

Conclusion