Author : Helen Obiageli Anazonwu, Francis Chinedu Egbunike, Ardi

Gunardi
Year : 2018

Title : Corporate Board Diversity and Sustainability Reporting: A

Study of Selected Listed Manufacturing Firms in Negeria.
Name of Journal : Indonesian Journal of Sustainability Accounting and
Management
Volume/Page : 2/1

Summary :

 Background

A director has very large duties and responsibilities, in a company. Because

directors are decision makers, both from decisions about small things such as
determining company strategies to difficult decisions regarding the determination of
the organizational structure, as well as monitoring and controlling the activities
carried out by the company.

For the sake of facing increasingly complex business developments, it is not

enough for just a director to have to manage the business, because of his limited
ability. So it should be assisted by other councils that have different abilities, sexes,
ages, and ethnicities and cultures, so diversity can occur. It also can be helped by
other structures of the organization, such as the existence of two CEOs, a
commissioner, and so on. This diversity will affect the creativity, innovation and
effectiveness in solving problems.

The demands of the times provide for companies to make reports in terms of
company operations, such as publishing environment, social and governance (ESG)
reports. However, if the report is prepared individually it will cause overlaps and a
lack of similarity in the content of the information contained in the report, thus
hampering the decision making process. Therefore, the company should make an
integration report, which is a report that integrates all information clearly and
concisely, whether it is information about governance, accountability, and other
information into a single report. So there is uniformity in the report, and can be
compared between companies. The diversity of directors is believed to provide better
disclosure in this report.

The case in Nigeria, generally the leadership in the company is dominated by

men, this is because of the culture and traditions of the country. However, even
though it has not been proven empirically, there are assumptions that in the company
many women have the role of director, then the company has the opportunity to have
a better performance. In addition, the board of directors of foreign citizens also has a
good effect, because foreign parties are considered to have good experience for the
development of companies in Nigeria.

Several studies have been conducted to find out whether diversity affects the
performance and reports in companies that are not from financial functions, but other
functions. Because several studies state that internal corporate governance
mechanisms include regulations, as well as exercises and processes that are directed
and controlled by directors, also have an important role in follow-up reports and
company performance. Previous empirical findings show very varied results betweem
the diversity of the board of directors, -more specifically on board member
nationality, the proportion of woman directors, proportion of non-executive directors,
and multiple directorships-, on sustainability reporting. Therefore, this research was
conducted to ascertain the influence of corporate board diversity on integrated
sustainability reporting by manufacturing firms in Nigeria.

 Purpose

In general:

To find out what is the board diversity influence sustainability reporting.

In specific:

 To find out wheather board member nationality is having an impact on

sustainable reporting
 To find out what is the proportion of women influence sustainable disclosure
 To find out if non-executive directors is influencing sustainable reporting
 To find out what is the influence of multiple directorships on economic, social
and governance disclosure having an impact on implementing sustainable
disclosure.

 Method
This research was conducted to examine factors of board diversity
affecting the company’s decision to execute sustainability reporting.
Independent variables used in this study is board member nationality, the
proportion of woman directors, proportion of non-executive directors, and
multiple directorships, while the dependent variable, sustainability reporting,
was measured using an Economic, Social, and Governance (ESG) index. The
population of this research is manufacturing companies that listed on the
Nigerian Stock Exchange (NSE) with the classification of under
conglomerates, consumer goods, and, industrial goods sector.
The data used in this research is secondary data in the form of
financial statement. Data analysis was performed using panel research design
within the domain of longitudinal research design.

 Result

The results of this research shows that board diversity influences the
sustainability reporting. Partially, the proportion of woman, non-executive
directors and multiple directorship have a significant positive on economic,
social and governance report. It means the higher proportion of woman, non-
executive and multiple directorship in an entity, the more likely they will
implement this CSR disclosure. But, this study finds that there is no
significant positive correlation between member nationality of board and CSR
disclosure.
 Conclusion
 The aim of this research is to ensure the influence between board
diversity and sustainability reporting. The empiric results have found that the
proportion of woman, non-executive and multiple directorship significantly
effect on sustainability disclosure which will bring benefit to stakeholders to
make a short or long-term decision.
 Strenghts
a. The authors describe the rill condition about board diversity in
Nigeria.
b. Abstract from this research so clearly described.

 Weaknesses
a. In this journal article, It only restrited to conglomerates, consumer
goods, and, industrial goods sector. Whereas they are many
discussions about this journal and also the author didn’t mention the
year of observation.
b. The researcher used too many direct quote in this paper. So we cann’t
see the original idea from writers.