Risk governance and firm value: exploring the hierarchical regression method

Erin, Olayinka; Aribaba, Foluso Olugbenga

doi:10.1504/aajfa.2021.111809

Cited by 6 publications

(17 citation statements)

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“…the number of meetings held per year). The choice of these variables is consistent with contemporary corporate governance literature (García-Meca et al , 2014; Chalmers et al , 2006; Al-Shaer and Zaman, 2016; Fukuda et al , 2018; Mehran et al , 2018; Adegboye et al , 2019a; Adegboye et al , 2019b; Adesina et al , 2020; Erin and Aribaba, 2021).…”

Section: Methodssupporting

confidence: 68%

Corporate governance and sustainability reporting quality: evidence from Nigeria

Erin¹,

Adegboye

Bamigboye

2021

SAMPJ

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Purpose This study aims to examine the association between corporate governance and sustainability reporting quality of listed firms in Nigeria. Design/methodology/approach The authors measure corporate governance using board governance variables (board size, board independence, board gender diversity and board expertise) and audit committee attributes (audit committee size, audit expertise and audit meeting). The authors measured sustainability reporting quality using a scoring system, which ranges between 0 and 4. The highest score is achieved when sustainability reporting is independently assured by an audit firm. The lowest score refers to the absence of sustainability reporting. The study emphasizes 120 listed firms on Nigeria Stock Exchange using the ordered logistic regression technique. Findings The results indicate that board governance variables (board size, board gender diversity and board expertise) and audit committee attributes (audit committee size, audit expertise and audit meeting) are significantly associated with sustainability reporting quality. Additional analysis reveals that external assurance contributes to the quality of sustainability reporting through corporate governance characteristics. Research limitations/implications This study is restricted to a single country. Future studies should consider a cross-country study, which may help to establish a comparative analysis. Likewise, the future study could consider other regression techniques using a continuous measurement of the global reporting initiative in measuring sustainability reporting quality. Practical implications This study’s findings have important implications for policymakers and practitioners, especially the corporate executives and top management. Companies are encouraged to restructure their board to enhance better monitoring and support towards better sustainability reporting. Social implications Disclosure on sustainability reporting helps corporate organizations advance the issues of sustainability both nationally and globally. Originality/value This current study adds to accounting literature by examining how corporate governance contributes to sustainability reporting practices within the Nigerian context. Drawing from the result, the study provides strong interconnectivity between the corporate board and audit committee in driving sustainability reporting quality within an organizational context.

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Section: Methodssupporting

confidence: 68%

Corporate governance and sustainability reporting quality: evidence from Nigeria

Erin¹,

Adegboye

Bamigboye

2021

SAMPJ

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“…African financials are a compilation of annual reports of emerging markets firms in Africa. Several studies used annual reports as a major channel for sustainability communication (Makarenko and Plastun, 2017; Rosati and Faria, 2019a; Tilt et al , 2020; Erin and Aribaba, 2021). This method relies on the construction of an index of diffusion that generally enables the researcher to allocate a score to each indicator.…”

Section: Methodsmentioning

confidence: 99%

Evaluation and analysis of SDG reporting: evidence from Africa

Erin¹,

Bamigboye

2021

JAOC

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Purpose The 2030 Agenda and the sustainable development goals (SDG) have gained considerable attention in research and public debate. This calls for accounting research on the subject of SDG disclosure. Based on this premise, this paper aims to evaluate and analyze the extent of SDG reporting by 80 listed firms from 8 selected African countries for the period of 2016 to 2018. Design/methodology/approach The study adopts a content analysis and survey method to evaluate the extent of SDG reporting by the selected African countries. This paper conducted content analysis through the use of the PricewaterhouseCoopers (PwC) framework and Global Reporting Initiative (GRI) framework to gauge the extent of firms’ compliance with SDG reporting. Also, this paper uses the business reporting indicators for each SDG developed by GRI to determine the compliance level of the selected firms regarding SDG reporting. The survey was targeted at the big four audit firms (PwC, KPMG, Ernst and Young and Deloitte and Touche). Findings The evaluation of SDG disclosure by the 80 listed firms in Africa is still at a very low level except for South African firms. Also, the findings of the business reporting indicators for each SDG target show that most of the firms show little or no concern to report on SDG activities. The result of the research survey indicates that voluntary disclosure, lack of management commitment, lack of regulatory enforcement and cost implications account for low SDG disclosure by the selected African firms. Research limitations/implications This study fails to consider the qualitative research approach in determining the extent of SDG disclosure in Africa, as the study did not allow respondents to freely express their opinion on SDG disclosure, as a large part of the survey used close-ended questionnaires. Practical implications This study’s findings call for clear responsibility and a strong drive for SDG performance from corporate institutions in Africa. While the overall responsibility rests on the government, the actualization of SDG cannot be achieved without support from corporate organizations. The empirical approach used in this study emphasizes the need for corporate organizations to embrace sustainable practices and to integrate SDG information into their reporting cycle. Originality/value This study contributes to growing literature in the area of corporate reporting, sustainability reporting and SDG research in Africa and other emerging economies. Also, this study provides original insight into the contribution of accounting research toward the achievement of SDG.

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“…Previous studies on the relationship between RMC and firm value have focussed strongly on risk management practices and how they affect firm performance; there is a lack of studies on how RMC could affect firm value in Nigeria. Furthermore, there have been contradictory outcomes in this area of the study; while some studies found positive and significant effects (Abdullah, Shukor, Mohamed, & Ahmad, 2015;Anton, 2018;Erin & Aribaba, 2021;Husaini & Saiful, 2017) others found negative and insignificant effects (Agustina & Baroroh, 2016;González, Santomil, & Herrera, 2020). In light of this contradiction, the current study was conducted to examine the relationship between RMC and the firm value of listed Nigerian oil and gas firms.…”

Section: Introductionmentioning

confidence: 94%

“…In recent times, risk monitoring has become a contentious issue for firms' management, risk practitioners, and management researchers alike in both developed and developing countries. This contentiousness stems from the fact that risk monitoring has been suggested as a mechanism to determine the risk appetite level, as well as an emerging paradigm for the management of a firm's risk portfolios through the use of natural hedges (see (Danisman & Demirel, 2019;Erin & Aribaba, 2021;Faisal & Hasan, 2020;Kaczmarek, 2019)). Kerraous (2018) and Willumsen, Oehmen, Stingl, and Geraldi (2019) have asserted that risk monitoring performs the roles of creating, capturing, and preserving value for the firm; this is no different for listed Nigerian oil and gas firms.…”

Section: Introductionmentioning

confidence: 99%

“…The Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2004) maintained that risk monitoring should be comprehensive to ensure that firms create, capture, and sustain value. Hence, the fundamental goals of enterprise risk monitoring are targeted toward creating, capturing, and sustaining firm value (Abdullah, Janor, Hamid, & Yatim, 2017;Agustina & Baroroh, 2016;Erin & Aribaba, 2021;Jesko & Sophie, 2018;Pagach & Warr, 2010). Risk monitoring is predominantly achieved through firms' risk committees (Rahman & Adnan, 2020).…”

Section: Introductionmentioning

confidence: 99%

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Risk Monitoring Committee and Firm Value of Listed Oil and Gas Companies in Nigeria: A Panel Data Analysis

Agbarha

2022

IJAEFA

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In this paper, the relationship between the risk monitoring committee (RMC) and the firm value of listed Nigerian oil and gas firms was examined. The risk monitoring committee was measured via the presence and size of the risk committee and the contributions of non-executive directors, while firm value was measured using Tobin’s Q, price-to-earnings per share, and earnings yield. Data were collected from the Machamratios database for the period 2012–2020. An aggregate panel data of eight (8) firms was obtained and the data were analyzed using descriptive and inferential statistical tools. The fixed effect (FE) and random effect (RE) models established that the risk monitoring committee measures insignificantly and negatively affected the value of the firm. This suggests that the risk monitoring committee does not affect firm value, particularly for listed Nigerian oil and gas firms. Consequently, for firms to enhance their value via a risk monitoring committee, management must develop a well-structured risk monitoring framework aimed at increasing firm value; this can be realized by reducing the size of the risk committee, the presence of the risk committee, and the contribution of non-executive directors in the risk committee structure of listed Nigerian oil and gas firms.

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Risk governance and firm value: exploring the hierarchical regression method

Cited by 6 publications

References 0 publications

Corporate governance and sustainability reporting quality: evidence from Nigeria

Corporate governance and sustainability reporting quality: evidence from Nigeria

Evaluation and analysis of SDG reporting: evidence from Africa

Risk Monitoring Committee and Firm Value of Listed Oil and Gas Companies in Nigeria: A Panel Data Analysis

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