Corporate Governance Mechanisms and <scp>ESG</scp> Disclosure Quality: The Moderating Role of Audit Committee Independence in an Emerging Market

ABSTRACT Concerns about the credibility and consistency of environmental, social, and governance (ESG) disclosures remain particularly pronounced in emerging markets where sustainability reporting frameworks and external enforcement mechanisms are still evolving. This study examines whether internal corporate governance mechanisms specifically board size, board independence, board gender diversity, and CEO duality affect ESG disclosure quality (ESGDQ), and whether audit committee independence moderates these relationships. The analysis focuses on non‐financial firms listed on the Ghana Stock Exchange over the period 2000–2023. Using an unbalanced panel dataset and applying robust econometric techniques, including dynamic generalized method of moments (GMM) and instrumental variable two‐stage least squares (IV‐2SLS), the study addresses potential endogeneity and firm‐level heterogeneity. The results show that board size, board independence, and board gender diversity are positively associated with ESG disclosure quality, while CEO duality is negatively related to disclosure outcomes. The findings further indicate that audit committee independence strengthens the relationship between governance mechanisms and ESGDQ, suggesting that effective oversight structures enhance the credibility and comprehensiveness of sustainability reporting. Empirically, the study provides evidence on the governance determinants of ESG disclosure quality in the context of an emerging capital market. The results are interpreted through the lenses of agency, stakeholder, and legitimacy theories, illustrating how internal governance arrangements may shape disclosure practices where formal regulatory enforcement remains limited. These findings highlight the importance of strengthening board oversight and audit committee independence to improve ESG transparency and accountability.