Accounting Project Topics

Determinant of Non-Financial Information Disclosure in Listed Industrial Goods in Nigeria

Determinant of Non-Financial Information Disclosure in Listed Industrial Goods in Nigeria

Determinant of Non-Financial Information Disclosure in Listed Industrial Goods in Nigeria

Chapter One

Objective of the study

The primary aim of this research is to comprehensively investigate the determinants influencing non-financial information disclosure practices among listed industrial goods companies in Nigeria. Specifically, the study seeks to achieve the following objectives:

  1. To assess the influence of existing regulatory frameworks.
  2. To Investigate how stakeholder demands from investors, customers, employees, local communities, and advocacy groups shape the non-financial information disclosure strategies of industrial goods companies
  3. To examine the correlation between effective corporate governance practices.
  4. To determine how companies leverage non-financial information disclosure as a tool for enhancing competitive advantage.



Non Financial Disclosures

In the recent decade, non financial information disclosure has witnessed and gained a growing attention and recognition in the developing and emerging nations due to inadequacy of traditional financial information reporting to fulfill the need in assessing the organization value (PWC, 2017). The study also pointed out that most top managers and executives in multinational companies believe that non-financial performance measures outweigh financial performance measures in terms of creating and measuring long-term shareholder value. According to Yusuf (2016), non-financial disclosures are those metrics which include index scores, ratios, counts and other information not presented in the basic financial statements. Corporate organizations have moved from passive to active information disclosure, from strict to know compliance disclosure to right to know complete disclosure and they are aspiring to link corporate strategy with one comprehensive stream of non financial and financial data (Maxwell, Smith and Brewster, 2010). According to Robb, Single, and Zarzeski, (2011), NFI disclosure is viewed as qualitative information in the companies’ reports which exclude financial statements and related footnotes. According to PWC (2017), non financial disclosures are used to reference all information outside the financial statements (metrics and narratives). It is recognized that NFDs may be an imperfect term as the information may ultimately have a financial dimension or impact. The study of Okoye (2016) measured non financial disclosure using Intellectual Capital Disclosure (ICD). Risk Management Disclosure was used as a proxy for non financial disclosure by Ismail and Rahman, (2013), Rouf (2016) proxy non financial disclosure using Corporate Governance Disclosure For the purpose of this research, the present study developed a model fit on non financial disclosures using the following Indexes; Intellectual Capital Disclosure (ICD), Risk Management Disclosure (RMD) and Corporate Governance Disclosure (CGD)

Intellectual Capital Disclosure

The Intellectual Capital disclosure reflects the corporate performance whereby it encourages users’ better decision making and evaluation on the company for preceding periods as well as alleviating ambiguity as economic value derives from production of goods and creation of Intellectual Capital (Azman and Kamaluddin, 2009). Intellectual Capital reporting has received significant attention among academics and research practitioners across the world (Abeysekera and Guthrie, 2014). It is recognized as a vital asset and value creator to companies in gaining a key source of competitive advantage compared to its competitors. Stewart (2017) defines it as “Packaged useful knowledge”. Sullivan (2010) saw it as knowledge that can be converted into profit. Roos and Roos (2017) state that intellectual capital is sum of knowledge of its members and practical translation of this knowledge into brands, trademarks and processes. Edvinson and Malone (2017) define it as the possession of knowledge, applied experiences, organizational technology, customer’s relations and professional skills that provide a company with a competitive edge in the market. According to Nigerian Code of Corporate Governance 2018, paying adequate attention to employees and occupational health and safety ensures successful long term business performance of the company. The following is recommended by NCCG 2018 as regard to ICD;

  • report on the management of safety issues including workplace accidents, fatalities, occupational and safety incidents
  • plans and strategy for addressing and managing the impact of serious diseases on the company’s employees and their families
  • training initiatives, employee development and the associated financial investment; The position of Global Reporting Initiative (G4-LA2, LA5, LA6, LA7 and LA8) on adequate disclosure on intellectual capital is as follows:
  • report on the benefits which are standard for full-time employees of the organization and availability of skills needed to achieve goals
  • report on availability and applicability of information systems, knowledge applications, databases, processes and other infrastructure
  • report on knowledge embedded in business network, which includes connections outside the organization
  • Percentage of total workforce represented in formal joint management committees that help monitor and advise on employees-customers-supplier relations
  • Workers who are involved in occupational activities who have a high incidence or high risk, talent and know-how of employees needed to achieve goals

In recent years, the importance of risk management has been evidenced in the corporate sector. Risk management is important because effective risk management improves the company’s performance by contributing to reduce fraud, managing potential threats, and more efficient use of resources. Taking and managing risk is the very essence of business survival and growth (Axelos Global Best Practise, 2014). In addition, risk management is a useful measure that enables good corporate governance. A good corporate governance is concerned with the balance of power between the various stakeholders involved in the business and with the way in which the organization is governed (Acharya and Clement, 2011). Risk disclosure however helps to mitigate information asymmetry and reduce stakeholder conflicts between shareholders and management. Furthermore, risk reporting is seen as a useful instrument of change management as well as an important instrument of accountability for management (Linsley and Shrives, 2014). According to Nigerian Code of Corporate Governance 2018, a sound framework for managing risk and ensuring an effective internal control system is essential for achieving the strategic objectives of the Company. The following are recommended by NCCG 2018 as regard to RMD; The Board should ensure the establishment of a risk management framework that:

  • defines the Company’s risk policy, risk appetite and risk limits; and
  • identifies, assesses, monitors and manages key business risks to safeguard shareholders’ investments and the Company’s assets;
  • formally approve the risk management framework and ensure that it is communicated in simple and clear language to all employees;
  • ensure that the risk management framework is integrated into the day-to-day operations of the business and provide guidelines and standards for management of key risks;
  • articulate, implement and review the Company’s internal control systems to strengthen the risk management framework;
  • conduct at least annually, or more often in companies with complex operations, a thorough risk assessment covering all aspects of the Company’s business and ensure that mitigating strategies have been put in place to manage identified risks;
  • obtain and review relevant reports periodically to ensure the ongoing effectiveness of the Company’s risk management framework;
  • ensure that the Company’s risk management framework is disclosed in the annual report; and·ensure that the risk management function is headed by a member of senior management who is a professional with relevant qualifications, competence, objectivity and experience. The position of Global Reporting Initiative (G4-2a-e) on risk management for its effectiveness is as follows
  • Description of the most important risks and opportunities for the organization arising from sustainability trends
  • Prioritization of key sustainability risks and opportunities according to their relevance for long-term organizational strategy, competitive position, qualitative, and (if possible) quantitative financial value drivers
  • Description of governance mechanisms in place specifically to manage these risks and opportunities, and identification of other related risks and opportunities
  • Targets for the next reporting period and medium term objectives and goals (that is, 3–5 years) related to key risks and opportunities
  • Description of sustainability trends, risks, and information system opportunities on the long-term prospects





In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.


Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.


According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.

This study was carried to examine determinant of non-financial information disclosure in listed industrial goods in Nigeria. Dangote sugar in Lagos forms the population of the study.




This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.




It is important to ascertain that the objective of this study was to ascertain determinant of non-financial information disclosure in listed industrial goods in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing determinant of non-financial information disclosure in listed industrial goods in Nigeria


This study was on determinant of non-financial information disclosure in listed industrial goods in Nigeria. Three objectives were raised which included; To assess the influence of existing regulatory frameworks, to Investigate how stakeholder demands from investors, customers, employees, local communities, and advocacy groups shape the non-financial information disclosure strategies of industrial goods companies, to examine the correlation between effective corporate governance practices and to determine how companies leverage non-financial information disclosure as a tool for enhancing competitive advantage. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Dangote sugar in Lagos state. Hypothesis was tested using Chi-Square statistical tool (SPSS).


In conclusion, this study delved into the crucial factors influencing the disclosure of non-financial information within the listed industrial goods sector in Nigeria. Through comprehensive research and analysis, it is evident that a multitude of determinants play a pivotal role in shaping the extent and quality of non-financial information disclosure practices.

The findings of this study highlight the significance of corporate governance mechanisms, including board independence and effectiveness, in promoting transparency and accountability. Moreover, the influence of organizational characteristics, such as firm size and industry type, cannot be underestimated in understanding the variations in non-financial information disclosure levels among companies.

The regulatory landscape also emerged as a critical factor, with compliance with existing disclosure requirements and standards serving as a catalyst for enhanced transparency. However, challenges remain in terms of enforcement and standardization, suggesting potential areas for future policy interventions.

Furthermore, the impact of stakeholder pressure, particularly from socially responsible investors and civil society, was found to stimulate companies towards more comprehensive non-financial information disclosure. This emphasizes the growing recognition of the role that environmental, social, and governance (ESG) considerations play in shaping corporate practices.

While this study contributes valuable insights to the literature on non-financial information disclosure determinants, it is important to acknowledge its limitations, such as the reliance on cross-sectional data and the potential for unexplored contextual nuances. Future research could delve deeper into these determinants using longitudinal data or qualitative approaches to provide a more holistic understanding of the disclosure landscape.

In essence, this study underscores the intricate interplay of factors influencing non-financial information disclosure within Nigeria’s listed industrial goods sector. As the business landscape continues to evolve and stakeholders demand greater accountability, the findings of this study provide a foundation for companies, regulators, and researchers to further enhance disclosure practices, ultimately fostering sustainable and responsible business conduct in the Nigerian context and beyond


Based on the findings and conclusions of this study on the determinants of non-financial information disclosure in the listed industrial goods sector in Nigeria, several recommendations are proposed to enhance transparency, accountability, and overall sustainability within companies operating in this sector:

  1. Strengthen Corporate Governance Practices: Companies should prioritize enhancing their corporate governance mechanisms, particularly by ensuring board independence, diversity, and effectiveness. A robust board of directors plays a pivotal role in overseeing disclosure practices and aligning them with the company’s strategic goals.
  2. Promote Awareness and Training: Companies should invest in training programs for their employees, particularly those involved in reporting and disclosure processes. This would improve the understanding of non-financial information disclosure requirements and facilitate more accurate and comprehensive reporting.
  3. Enhance Regulatory Oversight: Regulatory authorities should consider refining and strengthening disclosure requirements, while also ensuring effective enforcement. Clearer guidelines and consistent monitoring would encourage companies to adhere to non-financial reporting standards



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