Impact of Corporate Governance on Environmental Disclosure of Listed Industrial Goods Companies in Nigeria

Abstract

This study examined the impact of corporate governance on environmental disclosure among listed industrial goods companies in Nigeria. The industrial goods sector, comprising cement, steel, chemicals, paints, and packaging materials companies, contributes significantly to environmental degradation through carbon emissions, waste generation, and pollution, thereby necessitating greater corporate accountability through environmental disclosure. The study was anchored on Agency Theory and supported by Stakeholder Theory and Resource-Based Theory. An ex-post facto research design was adopted. The population comprised 13 industrial goods companies listed on the Nigerian Exchange Group, from which a sample of 9 companies was selected and studied over a seven-year period (2018–2024). Secondary data were obtained from the annual reports and accounts of the sampled companies. Corporate governance was proxied by board independence, board gender diversity, audit committee independence, managerial ownership, and board meetings, while environmental disclosure served as the dependent variable, with firm size and firm age included as control variables. Data were analyzed using descriptive statistics, correlation analysis, and panel regression techniques. The findings revealed that board gender diversity had a positive and significant effect on environmental disclosure, while board meetings also exerted a positive and significant influence. Conversely, board independence and audit committee independence had negative but insignificant effects, whereas managerial ownership showed a positive but insignificant effect. Firm size exhibited a positive and significant relationship with environmental disclosure. The study contributes to Agency Theory by demonstrating that selected internal corporate governance mechanisms, particularly board gender diversity and board meetings, enhance environmental transparency within Nigeria's industrial goods sector. The findings also provide practical evidence for corporate boards, regulators, and policymakers seeking to strengthen sustainability reporting and corporate environmental accountability. The study concludes that strengthening board diversity and improving board effectiveness can significantly enhance environmental disclosure. It recommends that listed industrial goods companies increase female representation on their boards to improve environmental transparency and sustainability reporting.