The Moderating Effect of Board Size on the Relationship between CEO Characteristics and Sustainability Disclosures

Abstract

Purpose: The paper examined the moderating effect of board size on CEO characteristics (CEO power (shareholdings and tenure), CEO gender and expertise) and sustainability disclosures in Nigeria.

Design/Methodology/Approach: The research design was ex-post facto with data collected from the annual reports of 70 non-financial listed companies in ten industrial sectors of the Nigeria Stock Exchange from 2013 to 2017. The theoretical frameworks were the agency theories, social roles, resource dependence and managerial power theories. The data was analyzed using the multiple regression analysis.

Findings: The findings revealed that CEO gender, shareholdings and tenure had a positive and a significant relationship with sustainability disclosures, CEO expertise had negative and significant relationship with sustainability disclosures. Moreover, the board size had no moderating effect on the relationship between CEO characteristics and sustainability disclosures.

Research limitations: The use of 7 items, disclosure indices to measure sustainability disclosures and delimitation of the study to the non-financial sector.

Practical Implications: There should be policy to appoint more female directors and CEOs as well as highly skilled and experienced independent and non-executive directors to the board. This will help to curtail CEO power and positively impact on the sustainability disclosures.

Originality: The paper examined how the board size moderates the relationship between CEOs’ characteristics (gender, expertise, power - shareholdings and tenure) and sustainability disclosures using evidence from an emerging market like Nigeria