CORPORATE GOVERNANCE MECHANISMS AND THE LIKELIHOOD OF CORPORATE SUSTAINABILITY REPORTING: EVIDENCE FROM LISTED FINANCIAL INSTITUTIONS IN EMERGING ECONOMIES

Abstract

This study examines the influence of corporate governance mechanisms on the likelihood of corporate social disclosure among listed financial institutions in Nigeria. Using panel data from 25 deposit money banks over the period 2005 to 2024, the study employs a binary probit regression model to estimate the probability of disclosure based on key governance attributes, including audit committee strength, board size, foreign board membership, and financial expertise. The findings reveal that board size exerts a positive and statistically significant effect on disclosure likelihood, suggesting that larger boards enhance transparency through diverse expertise and improved monitoring capacity. In contrast, audit committee strength shows a negative and significant relationship, indicating that excessive monitoring may discourage voluntary disclosure due to risk aversion and compliance-oriented behavior. Foreign board membership and financial expertise exhibit positive but insignificant effects, reflecting structural and institutional constraints within the Nigerian context. The results further demonstrate strong model performance and significant differences between disclosing and non-disclosing firms, confirming the robustness of the empirical approach. The study contributes to the literature by providing evidence from an emerging market and highlighting the nuanced role of governance mechanisms in shaping sustainability reporting practices. Policy implications emphasize the need for regulatory reforms that strengthen governance structures, promote standardized reporting frameworks, and enhance sustainability oversight.