GENDER DIVERSITY AND ENVIRONMENTAL REPORTING OF LISTED MANUFACTURING FIRMS IN NIGERIA

Abstract
Global economic developments are usually characterized by environmental activities that result in problems such as growing pollution, global warming, deforestation, desertification, uncontrolled dumping of waste materials among others. These developments have increased the pressure on firms from stakeholders to disclose their efforts towards protecting the earth and its resources. In the light of these, the study examined the effect of gender diversity on environmental reporting of listed manufacturing firms in Nigeria. It has a population of 51 manufacturing firms and a sample of 31 firms which was arrived at based on a criterion that only listed manufacturing firms with full data over the period of the study (2009 – 2019) are considered. It used secondary sources of data gathering and data were extracted from content analysis of annual reports and accounts of listed manufacturing firms understudied. The data gathered were analyzed using multiple regression technique; also diagnostic test such as normality, multicollinearity, heteroskedasticity, and Hausman specification were conducted on the data used. The study found that gender diversity has significant effect on environmental reporting of listed manufacturing firms in Nigeria. Based on this finding, the study recommends that the proportion of female directors on board should be increased in other to significantly improve environmental reporting endeavour of listed manufacturing firms in Nigeria.
Keyword: ISO 14031 reporting guideline, Voluntary disclosure, Diagnostic test, Information asymmetry
Introduction
The idea of environmental reporting is vital on the awareness that societal resources should be preserved if at all, the pursuit of the global economic development and welfare is to be achieved. The environment must not be destroyed in the course of pursuing economic gain; and the use of its resources to pursue these economic gains by businesses must be optimized; but how well optimized can be reasonably ascertained by the impact which businesses have made on the society through environmental reporting. Environmental reporting involves release of information on the impact of organization’s activities on the natural environment and such activities include, recycling, carbon management, emission and pollution management, tree planting and wild life conservation among others (Uyagu, 2019). The environmental information could be released through, annual reports, newsletter, press releases, magazines and sustainability reports. The decision whether a firm engages in environmental reporting or not can be influenced by several board characteristics, such as gender diversity, board size, board independence, CEO duality, ownership concentration amongst others. However, this study focused on gender diversity in order to examine its effect on environmental reporting of listed manufacturing firms in Nigeria. Gender diversity is a component of board’s decision-making tools that may affect either positively or negatively the level of environmental reporting of listed manufacturing firms in Nigeria. For example, Yaroson and Giwa (2016) opined that, the presence of female director on board would lead to an increase in environmental reporting of listed manufacturing firms in Nigeria and vice versa. In examining above statement, a board with female director may have the opportunity to make a robust decision, because of diversity of gender on board, which may result in more environmental activities being reported.
Gender diversity can be described as the proportion of female directors to total members on board. The gender diversity of the board could affect the level of environmental reporting of listed manufacturing firms in Nigeria. According to Gao, Hervai and Xiao (2015), the presence of female directors on board is a crucial aspect of corporate governance that can affect the extent of reporting environmental activities.
There exist distinct problems with corporate environmental reporting, it is unfortunate that irrespective of corporate governance in place, manufacturing firms in Nigeria have left trail of woes in their path with so much damage and problems to human life in the environmental where they operate; such as air and water pollution, habitat destruction, land degradation among others. It suffices to know that air and water pollution has become a significant environmental problem in Nigeria as it emits 70 million metric tons of carbon dioxide annually (USEIA, 1999). This adversely affects the socio-economic activities of local communities like Niger Delta, which is primarily based on fishing and farming. In Nigeria, environmental reporting seems to be at its lowest ebb, due to ineffectiveness of gender diversity (Liao, Luo & Tang, 2015). Also, in listed manufacturing firms in Nigeria, women on board are sometimes marginalized and discriminated upon when it comes to policy formulation and decision making in respect of corporate activities such as environmental issues (Mgbame & Onosaye, 2015). In addition, Nigeria being a developing and culturally biased nation, it is likely that women on board will not be vocal when it comes to decision on environmental issues. In other words, they can be marginalized and discriminated against. In addition, as regards environmental reporting, different organizations such as the chemical manufacturing association of Nigeria have issued guidelines, but these guidelines are only advisory in nature and not mandatory.
The previous studies concentrated on western economies (Aburaya, 2012; Akba, 2016; Barako & Brown, 2008; Campbell, 2004; Goyal, 2013), of which the findings and recommendations cannot be generalized to Nigeria because of the differences in economic system, market structure, geographical location and reporting requirements. In other to fill this gap, the study examines the effect of gender diversity on environmental reporting of listed manufacturing firms from Nigeria perspective, being a third world economy. The focus of the study is to assess the effect of gender diversity on reporting environmental activities of listed manufacturing firms in Nigeria. In order to achieve this, a hypothesis which says, gender diversity has no significant effect on environmental reporting of listed manufacturing firms in Nigeria was developed and tested.
The rest of this paper is organized as follows: Section 2 reviews the relevant literature; section 3 details the research methodology; section 4 presents the results and findings; and section 5 presents conclusion and recommendations.