Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria

Ponnle Josiah Oyekale; Samuel Adebayo Olaoye; Appolos Nwabuisi Nwaobia

doi:doi:10.11648/j.jfa.20221002.15

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Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria

Ponnle Josiah Oyekale, Samuel Adebayo Olaoye, Appolos Nwabuisi Nwaobia

Published in Journal of Finance and Accounting (Volume 10, Issue 2)

Received: 2 March 2022 Accepted: 21 March 2022 Published: 29 March 2022

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Abstract

Environmental sustainability performance and its disclosure are not company’s primary objectives rather are practices that lift the reputation of company in society. Environmental sustainability disclosure is not mandatory by accounting standards; however, information on environmental sustainability is of interest to various stakeholders for informed decision making. Financial reporting does not provide sufficient information for stakeholders to make an informed decision. It is with a view to addressing this concern that the study investigated the impact of corporate governance on environmental sustainability disclosure of non-financial companies quoted in Nigeria. Ex-post facto research design was adopted for the study. The population was 109 non-financial companies quoted in Nigeria as at 31 December, 2020. Stratified and purposive sampling techniques were used to select a sample of 72 non-financial companies that were in existence for a period of 9 years, 2012 to 2020. Data were extracted from published annual reports of the sampled non-financial companies and validated by certification of external auditors and the Nigerian Stock Exchange. Data were analyzed using descriptive and multiple regression analysis. The study found that the combined effect of corporate governance (CG) had a significant effect on environmental sustainability disclosure (END) (Adj. R²= 0.1783, F(6, 641) = 170.58, ρ = 0.00). The separated effects were varied. Board Independence (BOI), Nomination Committee (NOC), and Sustainability Responsibility Committee (SRC) have a positive and significant effect on END (BOI=0.0031, t-test=5.28, ρ = 0.001; NOC=0.1391, t-test=3.50, ρ = 0.008; SRC=0.6165, t-test=6.68, ρ = 0.000). Risk Committee (RIC) and Remuneration Committee (REC) have a positive and insignificant effect on END (RIC=0.0519, t-test=1.61, ρ = 0.147; REC=0.0083, t-test=0.020, ρ = 0.849) while Board Meetings has a negative and insignificant effect on END (BOM=-0.0016, t-test=-0.27, ρ = 0.792). The study concluded that corporate governance enhanced environmental sustainability disclosure of non-financial companies quoted in Nigeria. The study recommended that management should institute sound corporate governance mechanisms, especially a sustainability responsibility committee to enable improved environmental sustainability practices and their disclosure.

Published in	Journal of Finance and Accounting (Volume 10, Issue 2)
DOI	10.11648/j.jfa.20221002.15
Page(s)	121-131
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Advisory Committees, Corporate Governance, Environmental Sustainability Disclosure, Global Reporting Initiative, Legitimacy Theory

References

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Ponnle Josiah Oyekale, Samuel Adebayo Olaoye, Appolos Nwabuisi Nwaobia. (2022). Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria. Journal of Finance and Accounting, 10(2), 121-131. https://doi.org/10.11648/j.jfa.20221002.15

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Ponnle Josiah Oyekale; Samuel Adebayo Olaoye; Appolos Nwabuisi Nwaobia. Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria. J. Finance Account. 2022, 10(2), 121-131. doi: 10.11648/j.jfa.20221002.15

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Ponnle Josiah Oyekale, Samuel Adebayo Olaoye, Appolos Nwabuisi Nwaobia. Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria. J Finance Account. 2022;10(2):121-131. doi: 10.11648/j.jfa.20221002.15

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@article{10.11648/j.jfa.20221002.15,
  author = {Ponnle Josiah Oyekale and Samuel Adebayo Olaoye and Appolos Nwabuisi Nwaobia},
  title = {Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria},
  journal = {Journal of Finance and Accounting},
  volume = {10},
  number = {2},
  pages = {121-131},
  doi = {10.11648/j.jfa.20221002.15},
  url = {https://doi.org/10.11648/j.jfa.20221002.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20221002.15},
  abstract = {Environmental sustainability performance and its disclosure are not company’s primary objectives rather are practices that lift the reputation of company in society. Environmental sustainability disclosure is not mandatory by accounting standards; however, information on environmental sustainability is of interest to various stakeholders for informed decision making. Financial reporting does not provide sufficient information for stakeholders to make an informed decision. It is with a view to addressing this concern that the study investigated the impact of corporate governance on environmental sustainability disclosure of non-financial companies quoted in Nigeria. Ex-post facto research design was adopted for the study. The population was 109 non-financial companies quoted in Nigeria as at 31 December, 2020. Stratified and purposive sampling techniques were used to select a sample of 72 non-financial companies that were in existence for a period of 9 years, 2012 to 2020. Data were extracted from published annual reports of the sampled non-financial companies and validated by certification of external auditors and the Nigerian Stock Exchange. Data were analyzed using descriptive and multiple regression analysis. The study found that the combined effect of corporate governance (CG) had a significant effect on environmental sustainability disclosure (END) (Adj. R2= 0.1783, F(6, 641) = 170.58, ρ = 0.00). The separated effects were varied. Board Independence (BOI), Nomination Committee (NOC), and Sustainability Responsibility Committee (SRC) have a positive and significant effect on END (BOI=0.0031, t-test=5.28, ρ = 0.001; NOC=0.1391, t-test=3.50, ρ = 0.008; SRC=0.6165, t-test=6.68, ρ = 0.000). Risk Committee (RIC) and Remuneration Committee (REC) have a positive and insignificant effect on END (RIC=0.0519, t-test=1.61, ρ = 0.147; REC=0.0083, t-test=0.020, ρ = 0.849) while Board Meetings has a negative and insignificant effect on END (BOM=-0.0016, t-test=-0.27, ρ = 0.792). The study concluded that corporate governance enhanced environmental sustainability disclosure of non-financial companies quoted in Nigeria. The study recommended that management should institute sound corporate governance mechanisms, especially a sustainability responsibility committee to enable improved environmental sustainability practices and their disclosure.},
 year = {2022}
}

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TY  - JOUR
T1  - Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria
AU  - Ponnle Josiah Oyekale
AU  - Samuel Adebayo Olaoye
AU  - Appolos Nwabuisi Nwaobia
Y1  - 2022/03/29
PY  - 2022
N1  - https://doi.org/10.11648/j.jfa.20221002.15
DO  - 10.11648/j.jfa.20221002.15
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 121
EP  - 131
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20221002.15
AB  - Environmental sustainability performance and its disclosure are not company’s primary objectives rather are practices that lift the reputation of company in society. Environmental sustainability disclosure is not mandatory by accounting standards; however, information on environmental sustainability is of interest to various stakeholders for informed decision making. Financial reporting does not provide sufficient information for stakeholders to make an informed decision. It is with a view to addressing this concern that the study investigated the impact of corporate governance on environmental sustainability disclosure of non-financial companies quoted in Nigeria. Ex-post facto research design was adopted for the study. The population was 109 non-financial companies quoted in Nigeria as at 31 December, 2020. Stratified and purposive sampling techniques were used to select a sample of 72 non-financial companies that were in existence for a period of 9 years, 2012 to 2020. Data were extracted from published annual reports of the sampled non-financial companies and validated by certification of external auditors and the Nigerian Stock Exchange. Data were analyzed using descriptive and multiple regression analysis. The study found that the combined effect of corporate governance (CG) had a significant effect on environmental sustainability disclosure (END) (Adj. R2= 0.1783, F(6, 641) = 170.58, ρ = 0.00). The separated effects were varied. Board Independence (BOI), Nomination Committee (NOC), and Sustainability Responsibility Committee (SRC) have a positive and significant effect on END (BOI=0.0031, t-test=5.28, ρ = 0.001; NOC=0.1391, t-test=3.50, ρ = 0.008; SRC=0.6165, t-test=6.68, ρ = 0.000). Risk Committee (RIC) and Remuneration Committee (REC) have a positive and insignificant effect on END (RIC=0.0519, t-test=1.61, ρ = 0.147; REC=0.0083, t-test=0.020, ρ = 0.849) while Board Meetings has a negative and insignificant effect on END (BOM=-0.0016, t-test=-0.27, ρ = 0.792). The study concluded that corporate governance enhanced environmental sustainability disclosure of non-financial companies quoted in Nigeria. The study recommended that management should institute sound corporate governance mechanisms, especially a sustainability responsibility committee to enable improved environmental sustainability practices and their disclosure.
VL  - 10
IS  - 2
ER  -

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Ponnle Josiah Oyekale

Department of Accounting, Babcock University, Ilishan-Remo, Nigeria
Samuel Adebayo Olaoye

Department of Accounting, Babcock University, Ilishan-Remo, Nigeria
Appolos Nwabuisi Nwaobia

Department of Accounting, Babcock University, Ilishan-Remo, Nigeria

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Ponnle Josiah Oyekale, Samuel Adebayo Olaoye, Appolos Nwabuisi Nwaobia. (2022). Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria. Journal of Finance and Accounting, 10(2), 121-131. https://doi.org/10.11648/j.jfa.20221002.15

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Ponnle Josiah Oyekale; Samuel Adebayo Olaoye; Appolos Nwabuisi Nwaobia. Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria. J. Finance Account. 2022, 10(2), 121-131. doi: 10.11648/j.jfa.20221002.15

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Ponnle Josiah Oyekale, Samuel Adebayo Olaoye, Appolos Nwabuisi Nwaobia. Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria. J Finance Account. 2022;10(2):121-131. doi: 10.11648/j.jfa.20221002.15

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@article{10.11648/j.jfa.20221002.15,
  author = {Ponnle Josiah Oyekale and Samuel Adebayo Olaoye and Appolos Nwabuisi Nwaobia},
  title = {Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria},
  journal = {Journal of Finance and Accounting},
  volume = {10},
  number = {2},
  pages = {121-131},
  doi = {10.11648/j.jfa.20221002.15},
  url = {https://doi.org/10.11648/j.jfa.20221002.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20221002.15},
  abstract = {Environmental sustainability performance and its disclosure are not company’s primary objectives rather are practices that lift the reputation of company in society. Environmental sustainability disclosure is not mandatory by accounting standards; however, information on environmental sustainability is of interest to various stakeholders for informed decision making. Financial reporting does not provide sufficient information for stakeholders to make an informed decision. It is with a view to addressing this concern that the study investigated the impact of corporate governance on environmental sustainability disclosure of non-financial companies quoted in Nigeria. Ex-post facto research design was adopted for the study. The population was 109 non-financial companies quoted in Nigeria as at 31 December, 2020. Stratified and purposive sampling techniques were used to select a sample of 72 non-financial companies that were in existence for a period of 9 years, 2012 to 2020. Data were extracted from published annual reports of the sampled non-financial companies and validated by certification of external auditors and the Nigerian Stock Exchange. Data were analyzed using descriptive and multiple regression analysis. The study found that the combined effect of corporate governance (CG) had a significant effect on environmental sustainability disclosure (END) (Adj. R2= 0.1783, F(6, 641) = 170.58, ρ = 0.00). The separated effects were varied. Board Independence (BOI), Nomination Committee (NOC), and Sustainability Responsibility Committee (SRC) have a positive and significant effect on END (BOI=0.0031, t-test=5.28, ρ = 0.001; NOC=0.1391, t-test=3.50, ρ = 0.008; SRC=0.6165, t-test=6.68, ρ = 0.000). Risk Committee (RIC) and Remuneration Committee (REC) have a positive and insignificant effect on END (RIC=0.0519, t-test=1.61, ρ = 0.147; REC=0.0083, t-test=0.020, ρ = 0.849) while Board Meetings has a negative and insignificant effect on END (BOM=-0.0016, t-test=-0.27, ρ = 0.792). The study concluded that corporate governance enhanced environmental sustainability disclosure of non-financial companies quoted in Nigeria. The study recommended that management should institute sound corporate governance mechanisms, especially a sustainability responsibility committee to enable improved environmental sustainability practices and their disclosure.},
 year = {2022}
}

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TY  - JOUR
T1  - Corporate Governance and Environmental Sustainability Disclosure in Non-financial Companies Quoted in Nigeria
AU  - Ponnle Josiah Oyekale
AU  - Samuel Adebayo Olaoye
AU  - Appolos Nwabuisi Nwaobia
Y1  - 2022/03/29
PY  - 2022
N1  - https://doi.org/10.11648/j.jfa.20221002.15
DO  - 10.11648/j.jfa.20221002.15
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 121
EP  - 131
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20221002.15
AB  - Environmental sustainability performance and its disclosure are not company’s primary objectives rather are practices that lift the reputation of company in society. Environmental sustainability disclosure is not mandatory by accounting standards; however, information on environmental sustainability is of interest to various stakeholders for informed decision making. Financial reporting does not provide sufficient information for stakeholders to make an informed decision. It is with a view to addressing this concern that the study investigated the impact of corporate governance on environmental sustainability disclosure of non-financial companies quoted in Nigeria. Ex-post facto research design was adopted for the study. The population was 109 non-financial companies quoted in Nigeria as at 31 December, 2020. Stratified and purposive sampling techniques were used to select a sample of 72 non-financial companies that were in existence for a period of 9 years, 2012 to 2020. Data were extracted from published annual reports of the sampled non-financial companies and validated by certification of external auditors and the Nigerian Stock Exchange. Data were analyzed using descriptive and multiple regression analysis. The study found that the combined effect of corporate governance (CG) had a significant effect on environmental sustainability disclosure (END) (Adj. R2= 0.1783, F(6, 641) = 170.58, ρ = 0.00). The separated effects were varied. Board Independence (BOI), Nomination Committee (NOC), and Sustainability Responsibility Committee (SRC) have a positive and significant effect on END (BOI=0.0031, t-test=5.28, ρ = 0.001; NOC=0.1391, t-test=3.50, ρ = 0.008; SRC=0.6165, t-test=6.68, ρ = 0.000). Risk Committee (RIC) and Remuneration Committee (REC) have a positive and insignificant effect on END (RIC=0.0519, t-test=1.61, ρ = 0.147; REC=0.0083, t-test=0.020, ρ = 0.849) while Board Meetings has a negative and insignificant effect on END (BOM=-0.0016, t-test=-0.27, ρ = 0.792). The study concluded that corporate governance enhanced environmental sustainability disclosure of non-financial companies quoted in Nigeria. The study recommended that management should institute sound corporate governance mechanisms, especially a sustainability responsibility committee to enable improved environmental sustainability practices and their disclosure.
VL  - 10
IS  - 2
ER  -

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