ESG Performance and Information Asymmetry: Does Board Independence Matter in Nigeria?

This study investigates the moderating role of board independence in the relationship between environmental, social, and governance (ESG) performance and information asymmetry among Nigerian listed firms. Using panel regression analysis on a sample of 148 Nigerian firms over the 2011–2025 period, we examine whether independent boards effectively mitigate information asymmetry that may arise from ESG disclosure practices. Controlling for firm size, leverage, liquidity, asset tangibility, sales growth, firm age, earnings volatility, business segment diversification, natural risk management, industry characteristics, risk exposure, and year effects, our findings reveal that ESG performance significantly reduces information asymmetry, and this effect is substantially strengthened by board independence. Specifically, firms with higher ESG scores and greater board independence exhibit significantly lower bid-ask spreads, a key proxy for information asymmetry. These results suggest that independent boards enhance the credibility of ESG disclosures, reduce investor uncertainty, and facilitate efficient price discovery. Our findings have important implications for regulators, policymakers, and corporate governance practitioners in emerging markets, particularly in Nigeria, where ESG integration remains nascent yet increasingly critical for sustainable development and capital market efficiency.