Corporate Governance Mechanisms and Social Sustainability Disclosure in Non-Financial Firms Listed in Nigeria

Abstract

There is an increasing demand from stakeholders for social sustainability disclosure. However, annual reports have not been providing adequate information to the public to construct independent opinion on interrelationship between firm’s performance and humans. The study examined the effects of corporate governance mechanisms on social sustainability disclosure of non-financial firms listed in Nigeria. The work used ex-post facto research design. The population was 109 non-financial firms listed in Nigeria as at 31st December 2020. 72 firms were selected using stratified and purposive sampling techniques. Secondary data were extracted from annual reports of the sampled firms for 9 years, 2012 to 2020. A checklist was developed to obtain information on social sustainability disclosure from the sampled firms’ annual reports. Data were analyzed using descriptive and multiple regression analysis. The study discovered that the overall effect of corporate governance mechanisms had a significant impact on social sustainability disclosure. The disconnected influences were diverse. Board Independence, Risk Committee, Nomination Committee, Remuneration Committee, and Sustainability Responsibility Committee have a positive and significant effect on SOD while Board Meetings have a positive but insignificant influence on SOD. The study concluded that corporate governance mechanisms affected social sustainability disclosure of non-financial firms listed in Nigeria. The study recommended that management should ensure that there is adequate number of non-executive directors on board and institute necessary advisory committees to support the board in performing its responsibilities and drive enhanced social sustainability disclosure.