CORPORATE GOVERNANCE AND ESG PRACTICES IN EMERGING ECONOMIES: EVIDENCE FROM ENERGY INDUSTRY

Nuhu, Yusuf

Abstract

ABSTRACT
This study examines the impact of corporate governance variables on the ESG practices of energy firms from emerging economies. The study employs a sample of energy listed companies from Brasil, Russia, India, China and South Africa (BRICS) to examine the relationship between corporate governance and the extent of ESG disclosure, ESG assurance and ESG assurance quality. All data for the study relating to corporate board characteristics, audit committee charachteristics, ownership structure, ESG disclosure, ESG assurance and ESG assurance quality were extracted from the Bloomberg database, annual reports and companies website over a period of fourteen years from (2010 to 2023).
The first chapter investigate the impact of a set of CG variables that comprises board attirbutes, ownership structure and audit committee characteristics on the level of ESG disclosure while controlling for firm level charachteristics. The study utilised a sample of 1750 firm-year observations across five emerging BRICS economies over a period of fourteen years. The study finds positive and statistically significant relationship between board size, board independence, board gender diversity, foreign ownership, audit committee accounting and finance expertise, managerial ownership, audit committee meetings and frequency of board meetings with the level of ESG disclosure. Similarly, the finding indicates negative but insignificant relationship between audit committee size, institutional ownership, block holder ownership and the extent of ESG disclosure.
The second empirical study examines the impact of corporate governance variables on ESG assurance, a topic that has attract attention in both literature and practice in recent years due to unregulated and voluntary nature of sustainability practice. The empirical findings from understudied and overlooked context characterised by paucity of empirical studies document that board independence, board gender diversity, foreign ownership, managerial ownership, block holder ownership, audit committee independence, audit committee accounting and finance expertise and frequency of board meetings have positive and significant relationship with the decision to obtain third-party ESG assurance. However, the study finds insignificant relationship between institutional ownership, audit committee size and audit committee meetings with the decision to obtain third-party ESG assurance.

Due to the symbolic use of assurance practices, the final chapter empirically examine the impact of corporate governance variables on the ESG assurance quality. The quality of sustainability assurance reports has been a nascent but topical area in accounting and sustainability literature. The results show there is room for improvement regarding ESG assurance quality and provide empirical evidence of positive and statistically significant effect of board independence, board gender diversity, audit committee size, board meetings, managerial ownership, and audit committee accounting and finance expertise on the ESG assurance quality. However, the results indicate board size, foreign ownership and block holder ownership significantly impact ESGAQ negatively. The results of the study are robust to alternative measures, estimation methods, potential endogeneity problems such as sample selection bias, reverse causality/simultaneity, and unobserved heterogeneity. The findings of the thesis have important implications for the management, board of directors, investors and other stakeholders, standard setters, regulators, analysts, assurance providers and policy makers.

• Thesis Type: Thesis
• Online Publication Date: Mar 27, 2025
• Deposit Date: Feb 5, 2025
• Publicly Available Date: Apr 28, 2025
• Award Date: Mar 27, 2025