Board of Directors Characteristics and Quality of Sustainability Disclosure Among NSE-Listed Firms in Kenya

This study examined the influence of board of directors' characteristics on the quality of sustainability disclosure among firms listed on the Nairobi Securities Exchange (NSE) in Kenya. Although sustainability reporting has become mandatory under the Capital Markets Authority (CMA) Environmental, Social, and Governance (ESG) Reporting Guidelines, the quality, credibility, and consistency of disclosures remain uneven across listed firms. The study specifically investigated the effects of board composition, board independence, gender diversity, CEO duality, and board ESG expertise on sustainability disclosure quality, while assessing the moderating influence of regulatory pressure and board strategic orientation. The research was anchored on Agency Theory, Stakeholder Theory, Resource Dependence Theory, and Legitimacy Theory. A descriptive and explanatory cross-sectional research design was adopted, targeting all 66 firms listed on the NSE through a census approach. Primary data were collected using structured questionnaires administered to board members, company secretaries, ESG officers, compliance officers, and senior managers, while sustainability disclosure quality was assessed using a Sustainability Disclosure Quality Index (SDQI) developed from the Global Reporting Initiative (GRI), International Sustainability Standards Board (ISSB), and CMA reporting guidelines. The findings indicate that board characteristics significantly influence the quality of sustainability disclosure. Specifically, board independence, gender diversity, and ESG expertise positively enhance the credibility, completeness, and strategic relevance of sustainability reports, whereas CEO duality is associated with weaker disclosure quality. Furthermore, regulatory pressure and board strategic orientation strengthen the relationship between board characteristics and sustainability disclosure quality. The study recommends strengthening board independence, promoting gender diversity, enhancing ESG expertise among directors, and embedding sustainability into corporate governance and strategic decision-making to improve ESG reporting quality among NSE-listed firms.

Board Characteristics, Sustainability Disclosure Quality, Environmental, Social and Governance (ESG), Corporate Governance, Board Strategic Orientation

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