Abstract:
ABSTRACT
This study sought to examine the role of sustainability reporting on the link
between board diversity and financial performance of commercial banks in
Ghana. To serve this purpose, content analysis was conducted on annual
reports of commercial banks between 2010 and 2019. The independent
variable was proxied by educational background, qualification and tenure
diversities whereas the dependent variable was measured by ROA.
Furthermore, a sustainability disclosure index which comprises the economic,
environmental and social dimensions was computed guided by Generation
four (G4) Global Reporting Initiative Guidelines. The data was analyzed
quantitatively through dynamic panel-data estimation, two-step system GMM
using Stata. The findings of the study submit that board diversity has no
significant effect on banks financial performance. The study also reveals that
sustainability reporting has a significant positive effect on the financial
performance of commercial banks. Finally, in relation to the moderation
effect, the study concludes that sustainability reporting does not moderate the
link between board diversity and banks financial performance. Therefore, the
study recommends that banks embrace diversity on boards together with
conflict control mechanisms to minimize disagreements that may arise and
impede board performance in the course of duties. Again, the study
recommends that proper measures to manage and enhance sustainability
performance and disclosures be implemented to improve banks performance
