Political Connection, Board Characteristics and Environmental Disclosure in Nigeria

• Main Authors: Osazuwa, Nosakhare Peter, Che Ahmad, Ayoib, Che Adam, Noriah
• Format: Article
• Published: American Scientific Publishers 2017
• Subjects: HF5601 Accounting
• Online Access: http://repo.uum.edu.my/23627/; http://doi.org/10.1166/asl.2017.10480

The study aims at examining the relationship between political connection, board characteristics and environmental disclosures in Nigerian quoted firms.It adopts the quantitative approach using an unbalanced panel data of 142 firms for a five year period 2009–2013 obtained from the annual reports of the firms.Environmental disclosure is measured using content analysis of the annual report to arrive at an index score for each company. The panel random effect model was utilised in estimating the environmental disclosure model. The result provides support for the legitimacy and agency theories, as the study found political connection, board size and foreign presence positively related to environmental disclosure, while board meetings was negatively related. It is recommended that the board of director’s characteristics should be taken into consideration by all organisational stakeholders interested in ensuring corporate transparency and environmental sustainability. There is also need for management of companies to consider political connections as it is highly useful in regions with weak institutions.The study contributes to the literature by providing pioneering evidence of the relationship between political connection and environmental disclosure.Also, the study provides further support on the inconclusive results in the literature between board characteristics and environmental disclosure.Further, the study is one of the few Nigerian studies to provide evidence on environmental disclosure determinants using a panel data structure.Lastly, the study tests legitimacy and agency theories within a developing market like Nigeria.