Effect of Corporate Governance Mechanisms on Environmental Reporting of Listed Oil and Gas Firms in Nigeria

Abstract

Environmental degradation and stakeholder demand for transparency have increased the need for improved environmental reporting among firms, particularly in the oil and gas sector. This study investigates the effect of corporate governance mechanisms on environmental reporting of listed oil and gas firms in Nigeria. Corporate governance (independent variable) was proxied by board size, board composition, and audit committee independence, while environmental reporting (dependent variable) was measured using the cost incurred on environmental activities. The study employed panel data covering a 10-year period (2013–2022) from a sample of nine (9) listed oil and gas companies in Nigeria. Data analysis was conducted using panel data multiple regression. The regression results showed that board size had a negative and insignificant effect (p = 0.1668), board composition also had a negative and insignificant effect (p = 0.7810), while audit committee independence had a positive but insignificant effect (p = 0.1373) on environmental reporting. The findings imply that current corporate governance structures may not significantly influence environmental reporting practices in the sector. Therefore, oil and gas firms are encouraged to restructure their boards for better oversight and improved environmental disclosures. Continuous board involvement, frequent meetings, and specialized sustainability committees are recommended to enhance the quality and credibility of environmental reports. Additionally, external assurance by independent auditors should be strengthened to ensure reliable and stakeholder-relevant sustainability reporting.