Corporate ethical standard and the quality of sustainability reporting: empirical evidence from commercial banks in nigeria
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Abstract
Description
Compliance with legal requirements is mandatory for corporate entities in Nigeria,
but decision making in a situation that is not legally binding relies on the ethical standard of the
company. Sustainability reporting in Nigeria is voluntary, therefore the quality of disclosure is
at the discretion of company leadership. This study evaluated the ethical behaviour of Nigerian
commercial banks and how it affects their sustainability disclosure quality. The Focus was on
the proportion of each bank’s corporate annual reports that contain environmental disclosure,
social responsibility disclosure and governance disclosure. Information on the banks’ websites
that relate to sustainability policies or activities were also considered. This work includes an
extensive review of relevant literature, hinging the study on legitimacy theory. The Crosssectional
research design was utilized in undertaking the study. A sample of fourteen (14)
commercial banks was selected from the companies listed on the Nigerian stock exchange and
analysed for a period of 2008-2017 financial years. Pearson Correlation and Multivariate
Linear model analysis were employed to test the hypotheses. Findings revealed a positive
relationship between corporate ethical standard and sustainability disclosure of Nigerian
commercial banks. The level of corporate ethical standard in Nigerian banks causes significant
positive change in environmental reporting quality, social responsibility reporting quality and
governance reporting quality. It is hereby, recommended that company leadership should build
strong corporate ethical culture since it directly affects their sustainability. While quality
sustainability reporting practice is beneficial to the reporting entity, stakeholders and
environment.
Keywords
HF Commerce, HF5601 Accounting