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An examination of the quality of social and environmental disclosures by Nigerian oil companies

Odhiambo Odera (Masinde Muliro University of Science and Technology, Kakamega, Kenya)
Albert Scott (School of Commerce, University of Southern Queensland, Toowoomba, Australia)
Jeff Gow (School of Commerce, University of Southern Queensland, Toowoomba, Australia, and Department of Agricultural Economics, Stellenbosch University, Stellenbosch, South Africa)

Corporate Governance

ISSN: 1472-0701

Article publication date: 4 April 2016

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Abstract

Purpose

This study seeks to examine the quantity and quality of social and environmental disclosures (SEDs) of Nigerian oil companies. The study aims to analyse SED activities as reported by the oil companies in their annual reports.

Design/methodology/approach

The study analyses annual reports through content analysis. SED quantity is measured by alternative two units: number of sentences and number of pages. A two-point scale system to assess SED quality is used as follows: 1 = if SED is quantitative and reports specific activities of a company concerning its social and environmental responsibility; 0 = otherwise. Correlation analysis is performed among the different SED categories to identify the relationships among them. Kolmongrov–Smirnov and Shapiro–Wilk tests for normality are utilised.

Findings

SED activities are reported by most of the companies, and by quantity, employee information is found to be the most common type of disclosure. SED quantity and quality in the environment category is found to be overwhelmingly low despite the large-scale public concern expressed about the levels of the environmental degradation caused by oil company operations.

Research limitations/implications

The data collected for this study are based on one country, which controls diversity but limits the generalizability of the findings. The study is limited by the sample which includes mainly quoted companies, as they are believed to make improved disclosures because of their investor orientation and statutory obligations.

Originality/value

The study extends SED research by focusing on social disclosures such as employee-, community- and health- and safety-related disclosures. The study also investigates the motivations of SED providers and establishes a link between stakeholder demands/engagement and the level of disclosure.

Keywords

Citation

Odera, O., Scott, A. and Gow, J. (2016), "An examination of the quality of social and environmental disclosures by Nigerian oil companies", Corporate Governance, Vol. 16 No. 2, pp. 400-419. https://doi.org/10.1108/CG-05-2015-0065

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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