Corporate Governance and Sustainability Reporting of Listed Oil and Gas Companies in Nigeria

Abstract

This study explores the impact of corporate governance mechanisms on economic and  environmental sustainability reporting among listed oil and gas companies in Nigeria, addressing a significant gap in existing literature concerning governance and sustainability practices in developing economies. Given the vital role of the oil and gas sector in Nigeria’s economy and its
environmental implications, the study examines how board independence (BIND) influences sustainability disclosures. Utilizing a balanced panel dataset of nine listed oil and gas companies from 2017 to 2024, the research adopts the descriptive statistics, correlation analysis and First Difference Generalized Method of Moments (GMM) panel regression to analyze the relationship between governance structures and sustainability outcomes. Findings indicate that board independence has a significant positive effect on economic sustainability reporting, with a coefficient of 2.05 (p < 0.05). Although a positive relationship was also observed between board independence and environmental sustainability reporting, the association was less statistically significant. Robustness test (Arellano-Bond Serial Correlation Test) supports the reliability and consistency of the results. The study concludes that strong corporate governance, particularly through independent boards, plays a critical role in enhancing sustainability reporting in Nigeria’s oil and gas sector. It recommends that listed oil and gas companies in Nigeria should strengthen their boards by increasing the proportion of independent directors and forming dedicated sustainability committees led by these directors will enhance the oversight and quality of economic sustainability reporting. Also, companies should prioritize appointing independent directors with environmental and sustainability expertise to improve environmental sustainability reporting.