Corporate Governance Mechanism and Sustainability Reporting Disclosure of Listed Oil and Gas Companies in Nigeria

Abstract

The study focused on corporate governance mechanisms and sustainability reporting disclosure of listed oil and gas firms in Nigeria. Corporate governance mechanism was measured using board size, board independence, audit committee independence and ownership structure. However, sustainability reporting disclosure was measured using global reporting indicator (GRI). To achieve the objective of this study ex-post facto research design was adopted. The population of the study is made up of nine listed oil and gas companies in Nigeria. Census sampling technique was adopted; this implies that all the nine listed oil and gas companies were used as the sample of the study. The data collected were analyzed using Auto-Regressive Distributed Lag (ARDL). The findings revealed that board size, board independence, audit committee independence and ownership structure have significant effect on sustainability reporting disclosure of listed oil and gas companies in Nigeria. Therefore, the study concludes that corporate governance mechanisms significantly affect sustainability reporting disclosure of oil and gas companies in Nigeria. The study recommends amongst others that companies should maintain an optimal board size (typically 7–11 members, depending on firm complexity) that allows for effective decision-making without becoming too large and unwieldy. Avoid excessively small boards that may lack diverse expertise or excessively large ones that may suffer from coordination challenges. The study also recommends increase in the proportion of independent non-executive directors on the board. Independent directors should constitute at least 50% of the board to enhance objective oversight of sustainability issues and reduce managerial entrenchment.