Governance at the Helm: Audit Committee Structure and Discretionary Accrual-Based Earnings Management

Abstract

The motivation for this study stems from growing concerns about the weak value relevance of sustainability reporting in emerging markets and the need for effective governance mechanisms to enhance stakeholder confidence. This study examined sustainability reporting, board independence and corporate value of listed industrial goods companies in Nigeria. An ex-post facto research design was employed using secondary data from annual reports of sampled listed industrial goods companies for the period 2013– 2024. Corporate value was proxied by Price-to-Book Value (PBV), while sustainability reporting was disaggregated into environmental, social, and economic disclosure. Board independence served as the moderating variable, with firm leverage, size, and age as controls. Data were analyzed using the Random-Effects regression model. The results reveal that environmental sustainability reporting has a significant negative relationship with corporate value, implying that such activities may be perceived as cost inducing rather than value creating. Economic SR shows a significant positive relationship, whereas social SR is insignificant. Board independence exerts a strong positive and significant influence on corporate value, indicating that governance structures enhance investors’ confidence in sustainability practices. The study contributes to corporate governance literature by demonstrating that board independence strengthens the value relevance of sustainability disclosures in Nigeria’s industrial goods sector. It recommends among others that firms improve board composition and transparency to foster sustainable value creation.