Corporate Board Characteristics and Environmental Disclosure Quantity: A Comparative Analysis of Traditional and Integrated Reporting Evidence

Abstract: The aim of this study was to compare the influence of corporate board characteristics on the extent of environmental disclosure quantity of listed firms in two leading emerging economies in Africa, South Africa (integrated reporting framework) and Nigeria (traditional reporting framework). Methods: The sample was comprised of 303 firms including environmentally sensitive companies purposively selected for content analysis study in South Africa (213) and Nigeria (90). We used both descriptive, multivariate and regression models to comparatively analyze the differences about corporate board characteristics as determinants of the extent of their environmental disclosure quantity. Results: The results reveal a more significant positive association between board characteristics and environmental disclosure in South Africa and less relevant association in Nigeria. Also, the results support that board independence arrangement may serve as bonding mechanisms in weak reporting environments, suggesting a substitutive relationship between board independence and the regulatory framework. Quiet revealing a board with environmental committee show a higher tendency to be ecologic transparent in both countries. However, in a traditional reporting framework, the environmental committee is not enough; its effect was insignificant and highly significant in the integrated reporting framework. Further revealed is the significant positive effect of industry membership influence on environmental disclosure. In all estimated models of South Africa sample show that 45% of environmentally sensitive industries significantly influence environmental disclosure, while 51% is environmentally polluting industries in Nigeria show less concern on environmental disclosure. Interestingly, Audit firm size (Big4) positively and statistically significantly associated with overall environmental reporting in both countries. The results are consistent with stakeholder theory, agency theory, institutional and legitimacy theory suggesting that a strong board size, independent members of the board with auditing experience, the active environmental committee in conjunction with solid audit reputation may reduce information asymmetry. Our findings will be helpful for policymakers and other regulators who are interested in environmental impact reporting.