Verification Capacity and Governance Divide: How Audit Committees Drive Environmental but Not Social Disclosure in Sub-Saharan Africa

Research Question/ IssueThis paper examines whether audit committee independence uniformly promotes corporate transparency across environmental and social domains and how its oversight effectiveness varies by domain in institutionally weak markets.Research Findings/InsightsUsing a balanced panel of 2,770 firm-year observations from 277 listed non-financial firms in six Sub-Saharan African jurisdictions (2014–2023) and a two-step System GMM estimator, we find that audit committee independence significantly improves environmental disclosure but exerts no meaningful effect on social transparency. Board independence, not audit committee independence, moderates the suppressive effect of concentrated ownership on environmental reporting. Institutional quality moderates governance efficacy through two pathways: substitution, where the rule of law operates through board oversight, and complementarity, where corruption control operates through audit committee oversight.Theoretical/Academic ImplicationsWe develop the verification-capacity mechanism as a process-level theory specifying three causal stages through which audit committee independence activates (or fails to activate) environmental transparency: (1) technical mandate alignment, (2) information demand escalation, and (3) credibility signalling. Critically, we reframe social disclosure governance through legitimacy theory, predicting and confirming that social transparency is driven by mimetic isomorphism and stakeholder salience rather than committee-level verification. This dual-mechanism framework extends agency and institutional theories beyond their standard monolithic treatment of ESG oversight.Practitioner/Policy ImplicationsGovernance code drafters should mandate domain-specific verification expertise in audit committee charters, not merely independence quotas. Regulators in high-emission sectors should require external assurance for environmental disclosures. Global standard-setters should develop region-specific implementation guidance that distinguishes technically verifiable ecological reporting from legitimacy-driven social disclosure.