Board of Directors Characteristics and Environmental Sustainability Reporting in Sub-Saharan Africa

Abstract

Purpose: This study examines the relationship between institutional ownership structure, board of director credentials, and environmental sustainability reporting among non-financial publicly traded Sub-Saharan Africa (SSA) firms. Design/Methodology/Approach: The research employs a dynamic panel data estimation methodology, analysing 1,969 firm-year datasets from non-financial firms in SSA from 2012 to 2021. The Arellano-Bond dynamic panel data strategy, using the two-step generalised method of moments (GMM) technique, was applied for hypothesis testing. Findings: The findings indicate a relatively unfavourable relationship between the frequency of audit committee meetings, environmental sustainability reporting, and institutional ownership. No evidence suggests that institutional ownership moderates the relationship between environmental sustainability and other board attributes, such as committee size and independence. Research Limitation: The research is limited to publicly traded non-financial firms in SSA and the period from 2012 to 2021, which may affect the generalizability of the findings to other regions and time frames. Practical Implication: The significant impact of gender diversity in sustainability committees on environmental sustainability reporting highlights the need for firms to prioritise diversity in board composition. Social Implication: The study suggests that policymakers and regulators in SSA should focus on specific board committee attributes, such as gender diversity and institutional ownership's role in improving environmental sustainability reporting. Originality/Value: The study's new insight is that the results challenge the conventional perspective on the role of institutional ownership by demonstrating that institutional ownership does not moderate the relationship between board characteristics and sustainability reporting.