Corporate governance practices and sustainability reporting quality: evidence from the Nigerian listed financial institution

Figures & data

Table 1. Population and sample for the study.

	Number of Banks	Number of firm year	% of the target
		Observations	population
Listed banks as at 31^st Dec, 2021	23	230	100
Less: Non-interest banks	(2)	(20)	(9)
Less: Regional banks	(2)	(20)	(9)
Listed Banks in the final sample	19	190	8

Table 2. Measurement of sustainability reporting quality.

Score	Measurement	Interpretation	Result
0	There is no existence of SR	There was no mention of SR activities	Poor
		Of the company in the report
1	There is existence of SR	It was briefly mention in the chairman’s
		Report without detail information	Low
2	There is existence of separate SR	Report provides information on the three
		Elements (Economic, Social and
		Environmental) of sustainability	Fair
3	There is existence of separate SR	There is quantitative data on what the
		Bank committed to sustainability in
		Addition to reporting on Economic,
		Social & Environmental sustainability	Moderate
4	There is existence of separate SR	There is quantitative data on what the
		Bank committed to sustainability in
		Addition to reporting on Economic,
		Social & Environmental sustainability
		With an oversight committee	Good
5	There is existence of separate SR	There is quantitative data on what the
		Bank committed to sustainability in
		Addition to reporting on Economic,
		Social & Environmental sustainability
	With an oversight committee. A non-audit	firm provided assurance on the report	High
6	There is existence of separate SR	There is quantitative data on what the
		Bank committed to sustainability in
		Addition to reporting on Economic,
		Social & Environmental sustainability
		With an oversight committee. An audit
		Firm provided assurance on the report	Excellent

Table 3. Variable measurement and definitions.

Variable type	Definition	Measurement
Dependent Variable
SRQ	Sustainability reporting quality	Measured using a scale of 0–6
Independent Variable
CG-Index	Corporate Governance Index	Actual corporate governance score
		Scaled by the maximum obtainable CG mechanisms in the CG-Index
Control Variables
PROF	Return on capital employed	PBIT/CE
FGRW	Firm growth	% change in sales revenue
CGEAR	Firm gearing ratio	Debt/Equity ratio
AQUA	Audit quality	=1 if audit by big, 0 if otherwise
FSIZ	Size of the company assets	natural logarithms of net assets

Table 4. Descriptive statistics results.

Scale	0	1	2	3	4	5	6
Panel A: Frequency and Percentage for Sustainability Reporting Quality using Categorical Data
SRQ		− 36(18.9%)	81(42.6%)	30(15.8%)	26(13.7%)	11(5.8%)	6(3.2%)
Panel B: Binary Data
Oversight Com		147(77.4%)	43 (22.6%)
Assurance		11(64.7%)	6(35.3%)
Panel C: All variables
Variable		Mean	Min		Max	SD	OBS
Dependent
SRQ		2.69	1.00		6.00	1.17	190
Oversight Com		1.35	1.00		6.00	1.92	190
Assurance		5.35	5.00		6.00	0.45	17
Specific Test Variables
Diluted Ownership		3.26	1.93		4.78	0.76	190
Board Ind.		20.69	12.5		33.3	2.75	190
Audit Com Exp		13.37	8.05		21.9	1.95	190
Board Diversity		5.92	0.98		8.25	0.18	190
Shareholders’ R/P		0.75	0.00		2.00	0.61	190
Family Ownership		3.98	3.50		4.81	0.09	190
Composite Test Variable
CG Index		0.58	0.43		0.98	0.26	190
Control Variables
ROCE		5.93	2.65		8.28	3.61	190
FGRW		3.04	0.18		8.75	1.86	190
CGEAR		0.19	0.14		0.27	0.89	190
AQUA		0.96	0.00		1.00	0.02	190
FSIZE		0.68	0.53		0.95	0.11	190

Table 5. Rank order correlation matrix.

	SRQ	ROCE	FGRW	CGEAR	AQUA	FSIZE	CG-I	VIF
SRQ	1							1.842
ROCE	0.392	1						1.282
FGRW	0.535	0.475	1					1.776
CGEAR	0.476	0.226	0.349	1				1.525
AQUA	0.355	0.416	0.397	0.334	1			1.281
FSIZE	−0.318	0.433	0.294	0.217	0.257	1		1.637
CG-I	0.614	0.272	0.181	0.352	0.182	0.211	1	1.489

Table 6. Ordered logistic regression for CG-index and SRQ.

		Categorical data for marginal effects
Variables	Baseline Reg	Low	Fair	Moderate	Good	High	Excellent
DOWS	0.426***
	(0.139)
BIND	0.311**
	(.318)
ADFINE	0.637**
	(0.399)
BDIV	−0.329**
	(0.181)
SHRP	0.249**
	(0.115)
FNAT	−0.572***
	(0.105)
FOWS	−0.662***
	(0.214)
CG-INDEX	0.837***	−0.073***	−0.157**	0.443**	0.213**	0.175**	0.112**
	(0.384)	(0.066)	(0.048)	(0.137)	(0.019)	(0.111)	(0.036)
ROCE	2.294***	−0.069***	−0.094**	−0.221**	0.185**	0.099**	0.008*
	(0.887)	(0.013)	(0.041)	(0.118)	(0.016)	(0.007)	(0.009)
FGRW	1.228**	0.117***	0.078***	0.189**	0.213***	0.052**	0.047**
	(0.745)	(0.019)	(0.031)	(0.052)	(0.164)	(0.013)	(0.026)
CGEAR	0.652**	0.555**	0.611**	−0.317**	−0.240***	−0.138**	−0.104**
	(0.276)	(0.201)	(0.100)	(0.225)	(0.289)	(0.079)	(0.059)
AQUA	0.085**	−0.197**	−0.294**	0.526**	0.159**	0.041**	0.009
	(0.009)	(0.068)	(0.005)	(0.029)	(0.049)	(0.023)	(0.107)
FSIZE	−6.048***	1.085	−2.119**	−2.235**	−1.588**	−1.138**	−0.952**
	5.989	(0.262)	(0.144)	(0.416)	(0.393)	(0.118)	(0.031)

Table 7. Binary logistic regression for CG-Index and SRQ.

	1	2	3	4
Variables	Baseline	Audit	Baseline	Oversight
CG-INDEX	0.825***	0.051**	0.093**	0.771**
	(0.283)	(0.104)	(1.007)	(0.137)
ROCE	2.317***	0.058**	0.028**	−0.865**
	(0.415)	(0.228)	(0.666)	(0.224)
FGRW	2.006**	1.388***	0.075**	0.253**
	(0.185)	(0.299)	(0.394)	(0.427)
CGEAR	0.554**	0.555**	0.081**	−0.078**
	(0.142)	(0.714)	(1.015)	(0.015)
AQUA	0.298**	−0.089**	0.032**	0.099**
	(0.114)	(0.110)	(0.938)	(0.138)
FSIZE	−5.096**	−1.215**	0.087**	−2.156**
	3.188	(1.451)	(0.211)	(0.696)

Table 8. Ordered logistic regression for CG-Index and SRQ with alternative measures.

		Categorical data for marginal effects
Variables	Baseline Reg	Low	Fair	Moderate	Good	High	Excellent
DOWS	0.426***
	(0.139)
BIND	0.311**
	(.318)
ADFINE	0.637**
	(0.399)
BDIV	−0.329**
	(0.181)
SHRP	0.249**
	(0.115)
FNAT	−0.572***
	(0.105)
FOWS	−0.662***
	(0.214)
CG-INDEX	0.791***	−0.076***	−0.159**	0.438**	0.207**	0.179**	0.093**
	(0.384)	(0.066)	(0.048)	(0.137)	(0.019)	(0.111)	(0.036)
ROA	1.995**	−0.067**	−0.091**	−0.226**	0.189**	0.095**	0.007*
	(0.887)	(0.013)	(0.041)	(0.118)	(0.016)	(0.007)	(0.009)
FGRW	1.228**	0.117***	0.078***	0.189**	0.213***	0.052**	0.047**
	(0.745)	(0.019)	(0.031)	(0.052)	(0.164)	(0.013)	(0.026)
CGEAR	0.652**	0.555**	0.611**	−0.317**	−0.240***	−0.138**	−0.104**
	(0.276)	(0.201)	(0.100)	(0.225)	(0.289)	(0.079)	(0.059)
AQUA	0.085**	−0.197**	−0.294**	0.526**	0.159**	0.041**	0.009
	(0.009)	(0.068)	(0.005)	(0.029)	(0.049)	(0.023)	(0.107)
FSIZE	−4.048**	1.311**	−2.126**	−2.231**	−1.574**	−1.135**	−0.951**
	5.989	(0.262)	(0.144)	(0.416)	(0.393)	(0.118)	(0.031)

Data availability statement

Data for this study were extracted from the annual financial statements of the selected banks.