Corporate Governance Mechanisms and Sustainability Reporting of Listed Insurance Firms in Nigeria
FATOUNDE Adebimpe Christiana *
Department of Accounting and Finance, Elizade University, Ilara-Mokin, Ondo State, Nigeria.
OGBEIDE Sunday Oseiweh
Department of Accounting and Finance, Elizade University, Ilara-Mokin, Ondo State, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
Aims: This study investigated the effect of corporate governance mechanisms on sustainability reporting among listed insurance firms in Nigeria.
Methodology: The study employed correlational and causal research design. The population of the study covered twenty-two (22) listed insurance firms in Nigeria. The study utilized secondary data obtained from firms’ annual reports for the period of 2013 – 2023, yielding 220 firm-year observations. The System Generalized Method of Moments (GMM) estimation technique was applied to address potential endogeneity, heteroscedasticity, and firm-specific effects.
Results: Descriptive analysis revealed a low mean level of sustainability reporting (mean = .7272), indicating limited disclosure practices across Nigerian insurance firms. The correlation analysis showed weak but positive associations between board director’s reputational capital (BDRC) and sustainability reporting, and a weak negative relationship with board director’s nationality (BNAT). The regression results indicated that lagged sustainability reporting (SR–1) was positive and significant (P < .001), suggesting persistence in disclosure behaviour. BDRC had a strong and significant positive effect on sustainability reporting (P < .001), while BNAT had a negative and significant impact (P < .001). Among the environmental control variables, total greenhouse gas emissions (TGHGS) showed a significant positive relationship (P = .003), whereas renewable energy consumption (RENG) was negative and insignificant (P = .674).
Conclusion: The study concluded that board reputational quality significantly enhances sustainability disclosure, while foreign board representation may not translate into improved reporting within the Nigerian context. The study recommends that Nigerian insurance firms strengthen their governance structures by appointing directors with high reputational standing and proven records of integrity, as such individuals positively influence sustainability reporting and enhance stakeholder trust.
Keywords: Board Director Reputational Capital, board nationality, corporate governance, Nigerian insurance firms, sustainability reporting