Title: ENVIRONMENTAL, SOCIAL AND GOVERNANCE DISCLOSURES AND THE VALUE OF LISTED CONSUMER GOODS FIRMS IN NIGERIA: ROLE OF EXECUTIVE COMPENSATION
Authors:
Dorothy Aje Patrick EDEM, Terzungwe NYOR, Nma Mohammed AHMED and Samuel Eniola AGBI
Abstract:
In the contemporary business landscape, there is growing interest in the connection between executive compensation and Environmental, Social, and Governance (ESG) disclosures, particularly in achieving corporate objectives. Firms often leverage executive compensation as an incentive to drive ESG initiatives, ultimately enhancing firm value. Drawing on Instrumental Stakeholder Theory, this study examined the effect of ESG disclosures on the value of listed consumer goods firms in Nigeria from 2006 to 2023, with executive compensation as a moderating variable. The study population comprises 21 firms, with 16 firms purposively selected as the sample. Multiple regressions were employed for analysis in this study. The outcome of this study showed that environmental, social, and governance disclosures each have significant positive effect on firm value. Furthermore, executive compensation enhances these effects, as its moderating effect was both significant and positive in all three instances. The study recommends that firms adopt a strategic approach to ESG disclosure to foster positive perceptions among instrumental stakeholders, thereby enhancing firm value.
Keywords: Environmental, social and governance disclosures, executive compensation, instrumental stakeholder theory, price to book value.
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