Sustainability disclosure quality of Nigerian listed firms: the role of female leadership, board communication, and external assurance

Abstract

This study examined how female leadership, board communication, independent third-party assurance, and sustainability disclosure quality are interconnected in Nigerian listed firms. Using data from the top 100 firms on the Nigerian Exchange (NGX) Group from 2013 to 2022, comprising 1000 observations, the study evaluates its hypotheses. Employing a panel regression analysis with the Random Effect (RE) robust estimation technique, the findings demonstrate that female leadership, board communication, and external assurance positively and significantly impact sustainability disclosure quality. This suggests that having women in leadership roles, fostering effective board communication through shared membership, and obtaining independent (external) assurance for sustainability disclosures enhance the quality of such reports. The robustness of the results is confirmed by the One-Year Lag Effect, which aligns with the outcomes of the main model. This positive correlation signifies an enhancement in the quality of sustainability disclosures within Nigeria. However, there is room for improvement, as indicated by descriptive statistics revealing a 20% level of sustainability disclosure quality. This study underscores the need for regulators, firm management, and stakeholders to bolster compliance with sustainability reporting standards and guidelines, exerting pressure to elevate disclosure quality. In addition, the research fills gaps in the literature by providing fresh empirical evidence and insights regarding the significance of female leadership, board communication, and external assurance in shaping sustainability disclosure quality among Nigerian listed firms.

Keywords

• Sustainability disclosure quality
• female leadership
• board communication
• external assurance
• Nigeria
• Sandra Alves, Higher Institute of Accounting and Administration, University of Aveiro, Portugal