Board characteristics, audit firm choice and Environmental, Social and Governance Reporting in Environmentally Sensitive Listed Firms in Nigeria
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Date
2025
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Universite Felix Houphoute Boigny, Cote d’voire
Abstract
The study examined the role of board characteristics and audit firm choice in the
Environmental, Social, and Governance (ESG) disclosure in the Nigerian companies. The variables
included in the analysis included ESG disclosure which was measured by Global Reporting Initiative
(GRI) framework; audit firm choice; and board characteristics, including independence, gender
diversity, meeting frequency, and board size, and the control variables, including firm size, profitability
and leverage. The secondary data were obtained using annual reports of 26 companies on the
Nigerian Stock Exchange in six years of 2018-2023. The dataset was analyzed using panel corrected
standard errors. Findings revealed that board independence had statistically significant positive
impact on ESG disclosure at the 1 percent level of significance, hence, highlighting the critical role
of independent directors in promoting ESG reporting. Furthermore, this relationship was moderated
by audit firm choice, which implies that the effect of independent directors on ESG disclosure is
strengthened by the presence of a specific audit firm as well at the 1% level of significance. The
study found out that board attributes and audit firm selection jointly determine ESG disclosure
practices in Nigerian companies. Therefore, the authors recommend that organisations should
strengthen their board characteristics i.e. by focusing on appointment of independent directors who
provide independent oversight and provide balance in corporate decisions and interests of
stakeholders.
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Adigbole et al.