Abstract

Purpose: This study critically investigates the interplay between corporate governance effectiveness and the quality of Environmental, Social, and Governance (ESG) reporting in publicly listed firms. While prior research often assumes a linear relationship, this study interrogates whether stronger governance mechanisms truly translate into more accurate, reliable, and decision-useful ESG disclosures across diverse corporate contexts.

Design/Methodology: A quantitative research design was adopted. Data were collected from 150 publicly listed firms across multiple industries from 2020 to 2024. Corporate governance effectiveness was operationalized using board independence, audit committee quality, and ownership concentration, while ESG reporting quality was assessed via environmental and social disclosure indices. Regression analysis and correlation matrices were employed to examine the strength and significance of the relationships, controlling for firm size, profitability, and industry heterogeneity.

Findings: The results reveal that not all governance mechanisms equally enhance ESG reporting quality. Board independence and audit committee robustness showed a positive and significant effect, whereas ownership concentration had mixed outcomes. Firms with complex ownership structures exhibited inconsistencies in ESG disclosure credibility. These findings challenge the assumption that formal governance structures automatically guarantee high-quality ESG reporting, highlighting the nuanced influence of firm-specific and contextual factors.

Originality/Value: This study provides a critical reassessment of the causal link between governance and ESG disclosure quality, moving beyond descriptive narratives to uncover conditional and contextual drivers. By combining cross-industry data with rigorous quantitative analysis, it offers practical insights for regulators, investors, and policymakers seeking to improve ESG transparency and corporate accountability.