Effect of monitoring mechanisms on environmental disclosure of listed firms in Nigeria

This study examines the effect of monitoring mechanisms, specifically board attributes, audit committee characteristics and ownership types, on environmental disclosure environmental disclosure levels (ENDL) among listed firms in Nigeria, a context where such integrated analysis is lacking. Using panel data from 95 firms (2012–2022), we apply the Global Reporting Index to assess ENDL. The analysis utilizes panel data regression techniques, including both fixed-effects and random-effects specifications, along with the Generalized Method of Moments to control for endogeneity in the estimation. Firms with independent board, board environmental committees, environmental expertise, independent audit committees, audit committee financial expertise, audit committee gender, government and foreign ownership exhibit higher ENDL. However, chief executive officer’s gender and the audit committee meeting frequency negatively impact ENDL. The generalizability of this study's conclusions is potentially constrained by its country-specific context, as the data are drawn solely from the Nigerian market. To enhance the external validity of the findings, subsequent studies should replicate this analysis in other national settings. This study also paves the way for future inquiry by suggesting that the theoretical model could be expanded through the inclusion of moderating or mediating variables, which would provide a more nuanced explanation of the mechanisms driving environmental disclosure. Policymakers should strengthen governance mandates to enhance environmental transparency. For theory, it extends agency and stakeholder theory by demonstrating that general governance mechanisms are insufficient drivers of non-financial disclosure in emerging economies. This study has the potential to positively impact social outcomes by promoting environmental sustainability, corporate accountability and informed decision-making in Nigeria. This study uniquely integrates board, audit and ownership monitoring mechanisms into a single framework, offering insights for Nigerian regulators and firms.