EFFECT OF CORPORATE GOVERNANCE PRACTICES ON CORPORATE SOCIAL RESPONSIBILITY COST OF OIL AND GAS FIRMS IN NIGERIA

Abstract

This study empirically explored the effect of corporate governance practices on corporate social responsibility cost of Oil and Gas firms in Nigeria. The specific objectives captured the effect of board size (BSZ), board composition (BCP), board diligence (BDL), and board Independence (BID) on corporate donation of Oil and Gas firms in Nigeria. The study used a sample of five (5) randomly selected oil and gas firms, covering the period from 2010-2020. Ex-post facto and cross sectional research designs were adopted. Panel data of the study variables were extracted from the selected quoted Oil and Gas firms in Nigeria. These data were obtained from annual account and financial statement of the selected oil and gas firms within the period. Analytical tools employed were descriptive statistics and Panel Least Squares (PLS) simple and multiple regression analysis techniques. Some diagnostic and robust analysis including unit root test, normality test, and test of multicollinearity problem were performed. Electronically, the data analysis was aided by Eviews 10 econometric package. Findings revealed that corporate governance indices: board size (BSZ), board composition (BCP), board diligence (BDL) and board independence (BID) have positive and statistically significant effect on Corporate Social Responsibility (CSR) cost of oil and gas firms in Nigeria. The implication of the finding is that corporate governance practices promote firms corporate social involvement to a substantial degree and without a counter pulling effect. Based on these findings, it was recommended among others that the regulatory agencies should encourage firms to strengthen corporate governance practices in the Oil and Gas sector so as to promote their level of community involvement and therefore, enhance overall performance of the firms in Nigeria.