Board characteristics and sustainability reporting: a case of listed firms in East Africa

Abstract

Purpose This study aims to investigate the influence of board characteristics on sustainability reporting among listed firms in East Africa. Design/methodology/approach The study uses a sample of 79 listed firms drawn from East African securities exchanges and data from 2011 to 2020. Sustainability reporting is measured using Global Reporting Initiative, and the data is analyzed by using three-panel data estimation models – fixed effect, random effect and the generalized method of moments. Findings The results reveal that board gender diversity, board financial expertise and board independence are positively and significantly associated with sustainability reporting. Conversely, board size has a negative and significant effect on sustainability reporting. Practical implications The findings from the study provide valuable insights to firm owners and policymakers. The study highlights the importance of directors with financial knowledge, a high proportion of non-executive directors and women representation in board and smaller boards as a strategy that will help firms improve sustainability practices and reporting in East Africa. Social implications Results of this study underscore the effect of corporate governance (CG) dimensions on social responsibility activities, such as philanthropy, emission reduction and waste management initiatives as reported through sustainability responsibility. Originality/value This study adds to the growing literature on the relationship between CG attributes and sustainability reporting from a developing economy perspective. Specifically, the study examines how board gender diversity, size, independence and financial expertise affect sustainability reporting adoption.