Corporate Sustainability Performance and Firm Value: Examining Listed Nigerian Petroleum Companies from Stakeholder and Agency Theories’ Perspectives

Abstract

There is an increasing global concern about corporate sustainability performance. Many companies are criticized for the negative societal and environmental impact of their activities. For long-term sustainability, companies are faced with the challenge of how to manage relationship with the stakeholders. Corporate sustainability performance (CSP) requires companies to integrate economic performance with social and environmental performance. The main purpose of this study is to examine the effect of corporate sustainability performance on firm value of listed Nigerian Petroleum Companies and the moderating role of CEO power on such relationship. The research model is drawn from stakeholder and agency theories. The influence of CSP on firm value is established from stakeholder theory while the moderating role of CEO power is explained from the agency theory approach. Disclosure index via content analysis will be used in measuring CSP of the listed companies while Tobin’s q will be used in measuring firm value. The findings from this research will extend the application of stakeholder theory in utilizing CSP to manage relationship with stakeholders and the CEO’s role in reducing agency cost of CSP initiatives. The result will also give prospective shareholders an insight into the role of CSP on firm value.