DOES FOREIGN OWNERSHIP AND FOREIGN BOARD MEMBER IMPROVE THE QUANTITY AND QUALITY OF SUSTAINABILITY REPORTING AMONG NON-FINANCIAL LISTED FIRMS IN NIGERIA?

Abstract

The purpose of this study is to investigate the impact of foreign ownership and directorship on sustainability disclosures of non-financial listed firms in the developing countries. Sample consisted of 30 firms across the seven sectors of non-financial listed firms in Nigeria, covering a period of 5 years, 2016 – 2020. Analysis of data collected was carried out from three perspectives, first content analysis of sustainability quantity and quality disclosures by the sampled firms, using 97 indicators based on the GRI 2016 standards was carried out, with the 30 firms divided into two, firms with and without foreign ownership and directorship. The result was analysed using t-test to determine whether there was a significant difference between the means of the two groups. Then correlation between sustainability disclosures and foreign ownership and directorship was determined. Finally, an ordinary pooled regression analysis was carried out to determine the effect of foreign ownership and directorship on sustainability disclosures. T-test results showed positive significant difference between sustainability reporting quantity and quality disclosures of firms with and without foreign ownership and directorship. It was also found that sustainability quantity and quality disclosures were positively correlated with foreign ownership and directorship. Furthermore, the regression analysis showed that foreign ownership has a positive significant effect on sustainability quantity disclosure at 5% (0.150) but an insignificant effect on sustainability quality disclosures. Foreign directorship has positive significant effect on sustainability quantity and quality disclosures at 1% (9.731) and 5% (6.466) respectively. It is recommended that sustainability reporting should be made compulsory by the Financial Reporting Council of Nigeria, having adopted the first two standards issued by the International Sustainability Standards Board (ISSB).