Internal Control Systems and ESG Performance in Nigeria: Evidence from Listed Firms on the Nigerian Exchange Group
Year: 2026
Type: article
Abstract: This study investigates the relationship between internal control systems (ICS) and environmental, social, and governance (ESG) performance among listed firms on the Nigerian Exchange Group (NGX) from 2015 to 2022. Drawing on a panel dataset of 85 non-financial firms and employing a fixed-effects regression framework, the study operationalises ICS through four dimensions: board independence (BIND), audit committee effectiveness (ACE), risk management systems (RMS), and internal audit quality (IAQ). Six control variables—firm size (FS), firm profitability (FP), firm leverage (FLEV), growth opportunities (GO), firm age (FA), and liquidity (LIQ)—are incorporated to isolate the unique explanatory power of ICS on ESG outcomes. Findings reveal that all four ICS dimensions are positively and significantly associated with ESG performance, with board independence exerting the most substantial influence. Among control variables, firm size and firm age demonstrate robust positive effects, while firm leverage presents a statistically significant negative relationship. These results carry profound implications for policymakers, regulators, and corporate governance reformers seeking to anchor sustainability practices within the institutional architecture of Nigerian enterprises. The study contributes to the nascent body of knowledge at the intersection of corporate governance and sustainable finance in sub-Saharan Africa.
Author: Yahaya, Onipe Adabenege
Institution: Nigerian Defence Academy
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7129899674
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