Ownership Structure and Corporate Social Responsibility Disclosures of Listed Companies in Nigeria
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Abstract
This study investigated the relationship between ownership structure and Corporate Social Responsibility Disclosures (CSRD) with focus on the impact of managerial ownership, institutional ownership, foreign ownership and ownership concentration on CSRD. The study also used the United Nations Global Compact (UNGC) index as a framework for measuring the disclosing of CSR information. The study adopted a longitudinal research design and a sample of one hundred and eighteen (118) companies was selected from a population of one hundred and sixty eight (168) companies listed on the Nigeria Stock Exchange (NSE) as at 31 st December 2018. This was studied from year 2009 to 2018. The data collected from these companies was analysed using descriptive statistics, correlation analysis and panel regression analysis. Also, the panel regression analysis used fixed effect
model for data estimation. The results derived from the data analyses indicated that CSRD in Nigeria is low with an firms listed on the NSE, managerial ownership and foreign ownership have a significant negative effect on CSRD, while institutional ownership and ownership concentration have a significant positive effect on CSRD. The study therefore recommended that the luntary
nature of CSRD in Nigeria should be enhanced through compulsory disclosure requirements
as voluntary CSRD in Nigeria is low. Management should not be allowed to own large
amounts of equity shares as management ownership of equity shares has a negative
relationship with CSRD indicating that the more equity shares are owned by management, the
less CSRD are made. Institutional shareholders should be allowed to own large amounts of
equity shares as institutional share ownership is significant and positively related to CSRD, thus, indicating that as institutional share ownership increases, CSRD also increases. Foreign
ownership of equity shares should be reduced either through corporate regulations or
otherwise due to CSRD decreasing as foreign ownership of equity shares increases, and there
is a significant negative effect of foreign equity share owners on CSRD. Ownership
concentration should be encouraged in Nigeria especially when such concentration is in the
hands of institutional shareholders because ownership concentration among NSE listed firms
has a significant positive relationship with CSRD. This indicates that as ownership
concentration increases CSRD also increases. Institutional shareholders should be allowed
and encouraged to have representatives on the board of directors which represents corporate
management, in order to strengthen the relationship between management and institutional
shareholders, as the presence of institutional shareholders in NSE listed companies leads to
increase in the extent of CSRD
model for data estimation. The results derived from the data analyses indicated that CSRD in Nigeria is low with an firms listed on the NSE, managerial ownership and foreign ownership have a significant negative effect on CSRD, while institutional ownership and ownership concentration have a significant positive effect on CSRD. The study therefore recommended that the luntary
nature of CSRD in Nigeria should be enhanced through compulsory disclosure requirements
as voluntary CSRD in Nigeria is low. Management should not be allowed to own large
amounts of equity shares as management ownership of equity shares has a negative
relationship with CSRD indicating that the more equity shares are owned by management, the
less CSRD are made. Institutional shareholders should be allowed to own large amounts of
equity shares as institutional share ownership is significant and positively related to CSRD, thus, indicating that as institutional share ownership increases, CSRD also increases. Foreign
ownership of equity shares should be reduced either through corporate regulations or
otherwise due to CSRD decreasing as foreign ownership of equity shares increases, and there
is a significant negative effect of foreign equity share owners on CSRD. Ownership
concentration should be encouraged in Nigeria especially when such concentration is in the
hands of institutional shareholders because ownership concentration among NSE listed firms
has a significant positive relationship with CSRD. This indicates that as ownership
concentration increases CSRD also increases. Institutional shareholders should be allowed
and encouraged to have representatives on the board of directors which represents corporate
management, in order to strengthen the relationship between management and institutional
shareholders, as the presence of institutional shareholders in NSE listed companies leads to
increase in the extent of CSRD
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