Board Independence, Ownership Structure and Sustainability Reporting: Evidence from East African Listed Firms
DOI:
https://doi.org/10.53819/81018102t70123Abstract
This study examined whether board independence moderated the association between ownership structure and sustainability reporting among non-financial listed firms in four East African Community capital markets. The analysis considered managerial ownership, foreign ownership, ownership concentration and institutional ownership. Problem: Prior research has reported inconsistent ownership–disclosure relationships and has often treated board independence as an isolated governance attribute rather than a condition shaping shareholder monitoring. Evidence simultaneously covering multiple ownership categories and East African markets remains limited. Methodology: The study applied a positivist, explanatory longitudinal design using publicly available corporate reports and websites for 51 listed firms in Kenya, Tanzania, Uganda and Rwanda between 2015 and 2024, producing 510 firm-year observations. Sustainability reporting was measured through an economic, environmental and social disclosure index based on Global Reporting Initiative principles. Random-effects panel regression incorporated ownership variables, board independence, firm size, leverage and four ownership-by-independence interactions. Findings: Board independence was positively associated with sustainability reporting in the model without interactions (reported coefficient = 0.3240, p < .001). All four interactions were positive in the final model: managerial ownership (0.2708, p = .010), foreign ownership (0.4549, p < .001), ownership concentration (0.5657, p < .001) and institutional ownership (0.1064, p = .002). The overall R² was .5011. These estimates show conditional associations, not proof that independent directors caused disclosure improvements. Conclusion: Board independence was a consistent positive moderator of the relationships between the four ownership categories and disclosure extent. The results highlight the value of examining ownership and board oversight jointly in governance research and offer evidence relevant to boards, investors and market regulators. Interpretation remains constrained by observational data, reporting-based measurement and unverified model specification details.
Keywords: board independence; sustainability reporting; ownership structure; managerial ownership; foreign ownership; institutional ownership; East African Community
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