Board Diversity and Sustainability Reporting: Evidence from Industrial Goods Firms

MUSA, S., GOLD, N. O., AIFUWA, H. O. (2020). Board Diversity and Sustainability Reporting: Evidence from Industrial Goods Firms. Izvestiya Journal of Varna University of Economics, 64 (4), p. 377 - 398. DOI: 10.36997/IJUEV2020.64.4.377

22 Pages Posted: 25 Jan 2021

See all articles by Musa Saidu

Musa Saidu

Kwara State University

Nusirat Gold

Kwara State University

Hope Osayantin Aifuwa

Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City

Date Written: November 14, 2020

Abstract

The sustainable development goals (SDGs) adopted by all the United Nations member countries were to reduce the social and ecological outcome of businesses and governments across the globe, among others. Businesses can key into this agenda by disclosing their economic, environmental and social impact in their financial reports. However, in Nigeria, the extent of sustainability reporting amongst firms is still low and not a listing requirement. Against this backdrop, this study investigated the influence of a diverse board on the extent of sustainability reporting in listed industrial goods firms on the Nigerian Stock Exchange from the period 2014-2018. We developed a sustainability disclosure index using the Global Reporting Initiative (GRI) guidelines to score the information content of annual reports relating to sustainability performance. Nationality, age and educational level were used to proxy diversity in the boardroom. The study also used descriptive and inferential statistics to summarize the data and to draw an inference on the population studied. Our study failed to validate the theoretical framework - Stakeholder Dependency Theory used in the study, as results from the panel least squares regression revealed that age diversity in the boardroom negatively and significantly affects the extent of sustainability reporting. Furthermore, we found no evidence on the nexus between nationality diversity and sustainability reporting; and education level diversity and sustainability reporting. The study concluded that diversity in boardroom influences the extent of sustainability reporting in Nigeria. This study recommends that firms should increase the representation of foreign directors in the boardroom because they add value and a wealth of experience to the board.

Suggested Citation

Saidu, Musa and Gold, Nusirat and Aifuwa, Hope Osayantin, Board Diversity and Sustainability Reporting: Evidence from Industrial Goods Firms (November 14, 2020). MUSA, S., GOLD, N. O., AIFUWA, H. O. (2020). Board Diversity and Sustainability Reporting: Evidence from Industrial Goods Firms. Izvestiya Journal of Varna University of Economics, 64 (4), p. 377 - 398. DOI: 10.36997/IJUEV2020.64.4.377 , Available at SSRN: https://ssrn.com/abstract=3730527

Musa Saidu (Contact Author)

Kwara State University

Kwara State University Rd
Malete
Nigeria

Nusirat Gold

Kwara State University ( email )

Department of Public and Environmental Health
Malete, Kwara State 240101
Nigeria

Hope Osayantin Aifuwa

Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City ( email )

Edo State, Nigeria
Benin, CA
Nigeria
+2348113232082 (Phone)

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