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Corporate Governance: Factors Influencing Voluntary Disclosure by Publicly Traded Canadian Firms
Abstract
This study reports on the comprehensiveness of voluntary corporate governance disclosures in the annual reports and management information circulars of Toronto Stock Exchange (TSE) firms. It focuses on disclosure of the corporate governance practices implemented by the same of TSE 300 firms vis-a-vis the 14 guidelines set out in the TSE's report on corporate governance Where Were the Directors? The analysis indicates that only a very few firms disclose that they have fully implemented the TSE guidelines, and that the extent of disclosure of corporate governance practices implemented varies widely among the firms. It then tests factors associated with the comprehensiveness of such disclosure and the choice of disclosure medium using simultaneous equations multivariate analysis. It also assesses the influence of publicized corporate governance failures on disclosure. Overall, the results suggest that the choices of disclosure medium and the extent of disclosure are made concurrently, and are influenced by the strategic considerations of management.
... This is not simple because sustainability reporting forces businesses to collect, analyze, and report information related to economic, social, environmental, and corporate governance aspects (Buallay, 2019). In particular, governance information is said to be content that has rarely been published before (Bujaki & McConomy, 2002), but this information is required for sustainability reporting. It can be seen that the quality of sustainability reporting is a significant challenge for businesses. ...
... In the sustainable development trends, stakeholders and investors focus on sustainability reporting instead of financial reporting (Herremans et al., 2016). Building sustainability reporting seems to be a challenge for managers because sustainability reporting requires disclosing information related to social and environmental aspects, especially confidential information such as corporate governance (Abu Bujaki & McConomy, 2002). Agency problems can arise when managers provide sustainability reporting with information that is adversarial and dishonest. ...
... Besides, ASEAN firms rarely disclose social and governance information on sustainability reporting (Bujaki & McConomy, 2002; Karyani et al., 2020), but they are required to disclose them when practicing ESG. This can lead to providing misleading and unreliable information about social and governance pillars; this argument is also consistent with the characteristics of ASEAN countries (Khunkaew et al., 2023). ...
Research on sustainability and firm value has increased recently. However, there is little evidence in this context from ASEAN+3 (i.e., three major Asian economies [South Korea, Japan, and China] and six dynamic economies in the ASEAN region [Indonesia, Malaysia, Singapore, the Philippines, Thailand, and Vietnam]). Therefore, this study explores the impact of sustainability reporting quality on firm value in the ASEAN+3 context. The study also explores the moderating role of environmental, social, and governance (ESG) practices, board gender diversity, board size, and the number of board meetings on the “sustainability reporting quality—firm value nexus.” Data collected from Thomson Reuters Asset4 with a sample size of 923 firms during the period 2019–2023 (4615 firm‐year observations). Regression analysis techniques used include pooled ordinary least squares, fixed effects, and random effects models. The analysis results show new and unique discoveries from ASEAN+3. First, sustainability reporting quality has a positive impact on firm value. Second, ESG practices negatively moderate the “sustainability reporting quality—firm value nexus.” Third, the higher number of board members reduces the “sustainability reporting quality—firm value nexus”; however, the negative level of major economies is lower than that of ASEAN countries. Finally, the firm with more independent female directors strengthens the “sustainability reporting quality—firm value nexus.” This study enriches signaling theory and agency theory by highlighting the complex relationship between components and firm value. To enhance firm value within ASEAN+3, policymakers should prioritize standardized ESG reporting regulations and transparent communication channels; stakeholders must hold managers accountable for genuine ESG implementation and high‐quality reporting; and businesses should prioritize board diversity, particularly independent female directors, alongside sustainability training.
... We contribute a uniquely Canadian perspective to the understanding of COVID-19 corporate disclosures; 2. We focus on accounting-related corporate disclosures, an understudied aspect of corporate responses to the pandemic, rather than stock market responses to COVID-19; 3. We add to the literature on the choice of different corporate disclosure media such as the F/S and MD&A documents. This builds on work done by Albitar et al. (2021) and Bujaki and McConomy (2002); 4. We offer a unique forward-looking longitudinal approach to understanding the content, evolution and determinants of COVID-19 corporate disclosures, including how these disclosures are affected by corporate governance and jurisdictional factors. Understanding the evolution of disclosures over time during the pandemic fills a void as suggested by Albitar et al. (2021), Elmarzouky et al. (2021), and Dutta et al. (2023); and 5. ...
... Gibbins et al. (1992) provide theoretical support for different dimensions of managed disclosure, including managing the choice of disclosure medium. Bujaki and McConomy (2002) provide evidence that firms strategically decide which disclosure medium to adopt. Voluntary disclosure theory notes that a key determinant of voluntary disclosure is the cost of disclosing (Verrecchia, 1983), and prior research notes that large firms tend to voluntarily disclose more as they have greater financial resources (Zeghal, 1984), more pressure from stakeholders and higher political costs (Elfeky, 2017). ...
... Thus, our findings contribute directly to the accounting literature regarding COVID-19 disclosures and to the literature on the choice of disclosure medium. The choice of disclosure medium is recognized as an aspect of impression management (Brennan & Merkl-Davies, 2013;Bujaki & McConomy, 2002). ...
We assess content, evolution and determinants of COVID-19 disclosures in accounting documents using natural language processing for TSX60 firms. We evaluate sentiment, extent of disclosure, choice of disclosure medium, links to governance, and the relationship with performance. We focus on accounting-related disclosures, an understudied aspect of corporate responses to the pandemic, and add to the choice of disclosure media literature. Our unique forward-looking longitudinal approach to understanding the content, evolution and determinants of COVID-19 corporate disclosures includes an evaluation of how these disclosures are affected by corporate governance and jurisdictional factors. Our findings include evidence of an inverse relationship between causal reasoning in disclosures and performance, with firms attributing poor performance to the pandemic across years, consistent with impression management.
... Company size is one of the factors that determine company ACD practices. Previous research shows that firm size (SIZE) influences the level of environmental disclosure (Bujaki and McConomy, 2002;Al-Tuwaijri et al., 2004;Alsaeed, 2006;Clarkson et al., 2013;Fatemi et al., 2017) Bujaki and McConomy (2002) found that large companies tend to disclose more in their annual reports than smaller companies. De Villiers and Staden (2011) say larger companies have more resources to devote to different problems, such as environmental disclosures and also to attract the attention of stakeholders. ...
... Company size is one of the factors that determine company ACD practices. Previous research shows that firm size (SIZE) influences the level of environmental disclosure (Bujaki and McConomy, 2002;Al-Tuwaijri et al., 2004;Alsaeed, 2006;Clarkson et al., 2013;Fatemi et al., 2017) Bujaki and McConomy (2002) found that large companies tend to disclose more in their annual reports than smaller companies. De Villiers and Staden (2011) say larger companies have more resources to devote to different problems, such as environmental disclosures and also to attract the attention of stakeholders. ...
... The results of this study indicate that the size of the company can be a positive driving factor for ACDs in mining, construction, transportation, communication and manufacturing companies in Indonesia while the other three factors, specifically the ROA, leverage and company age do not affect the ACD. Company size is one of the factors that drive companies to make more disclosures, Bujaki, and McConomy (2002) find that large companies tend to disclose more in their annual reports than smaller companies. De Villiers and Staden (2011) say larger companies have more resources to devote to different problems, such as environmental disclosures and also to attract the attention of stakeholders. ...
This paper presents an analysis of anti-corruption disclosures of Indonesian companies, and also examines the determinants, which consist of the company’s size, return on assets, leverage, and age. The research was conducted with samples from five industry categories namely, mining, construction, transportation, communication, and manufacturing, that are prone to corruption based on previous literature. The sample companies were listed on the Indonesian Stock Exchange (IDX) period 2016-2017. This paper used analyses of annual report content taken from the IDX and the company’s website for the anti-corruption disclosure data; while financial data was taken from the Thomson Reuters Eikon database. The results showed the low average score of anticorruption disclosure (16.3%) on 402 research observations. 170 companies have anticorruption disclosures above the average while 232 companies have less than the average. From the five industries, the highest anti-corruption disclosure score is 67.5%(construction sector), and the lowest is 27.5%, which comes from the communication industry. The findings also showed that company’s size was a significant predictor of anti-corruption disclosures, while the other determinants are found to have no association with the level of anti-corruption disclosure.
... On the one hand, it is assumed that larger companies have more extensive resources (e.g., financial and human capital) that enable good and more comprehensive (corporate governance) reporting, despite high procurement costs ( Analogously to large companies, companies with a high level of debt are also more dependent on the capital market and, in line with the signaling theory, have an incentive to reduce information asymmetries for (potential) investors through extensive reporting (Depoers, 2000). Based on this theoretical assumption, the investigations by Scholtz and Smit (2015) as well as Bujaki and McConomy (2002) also provide empirical evidence supporting that the scope of corporate governance reporting increases with the level of indebtedness of the company. ...
... It is argued that -analogous to companies with a high level of debt -companies with low corporate performance are under greater pressure from the capital market. They have a stronger incentive to persuade shareholders and potential investors with good corporate governance reporting and reduce information asymmetries (Bujaki & McConomy, 2002). Moreover, through targeted reporting, executive and supervisory boards can justify low corporate performance; improve the company's reputation and their own reputation (Collett & Hrasky, 2005). ...
... Moreover, through targeted reporting, executive and supervisory boards can justify low corporate performance; improve the company's reputation and their own reputation (Collett & Hrasky, 2005). Bujaki and McConomy (2002) documented this inverse relationship between corporate success and corporate governance reporting. Scholtz and Smit (2015) also assumed a negative link between corporate growth and corporate governance reporting but failed to prove it. ...
This study examines the factors influencing the quality of corporate governance reporting by listed German companies. Additionally, we analyse the development of corporate governance reporting practices in Germany over a three-year observation period. Using panel data regressions, we analyse the relationship between various corporate characteristics, performance characteristics, and corporate governance characteristics and the quality of corporate governance reporting. We quantify the reporting quality using a scoring model for the largest listed German companies in the period 2016-2018. Our results indicate that the quality of corporate governance reporting has improved steadily in recent years. This trend, however, should not detract from the fact that the quality of corporate governance reporting is dependent on corporate characteristics but not on firm performance, nor corporate governance characteristics. Our empirical findings elucidate these relationships.
... Several empirical studies have examined determinants of firms' financial communication (Lang and Lundholm, 1993 ;Bertrand, 2000 ;Chen and Jaggi, 2000 ;Paturel et al., 2006) and more specifically the relationship between some governance mechanisms and financial communication (Forker, 1992 ;Bujaki and McConomy, 2002 ; Labelle and Schatt, 2005). Moreover, most of these studies used Anglo-Saxon data and other developed countries. ...
... Managers of listed firms possess some degree of discretion in choosing the extent and quality of disclosed information. This assumption has been confirmed by the works of Labelle (2002) and Bujaki and McConomy (2002). ...
This paper proposes to link financial communication quality of listed Tunisian firms to two determinants developed by the literature: shareholding and characteristics of board of directors. Financial communication quality is operationalized by a multi-item composite index applied to annual reports of 31 Tunisian firms listed on the Tunis Stock Exchange (TSE) during the year 2009. This quality index allows for attributing a score to each firm of the sample, from which two groups of firms with good/poor financial quality are extracted. Results of mean-difference tests indicate that firms with good financial communication possess a diffused capital structure, i.e. having an institutional shareholding, shareholders-directors, an independent board of directors and separating power and management. The conducted logistic regressions enabled us to conclude that probability of a good quality financial communication is higher than an important institutional shareholding, a weak manager shareholding and that the firm separates between management and ownership. Our results confirm most of our hypotheses, though they reject those related to directors' shareholding, size and independence of the board. On the whole, these results corroborate only partially predictions proposed by agency theory.
... Fourthly, prior research is tilted heavily to investigating the determinants of disclosures (Wallace, et al, 1994;Wallace & Naser, 1995;Owusu-Ansah, 1998;Haniffa & Cooke, 2002;Ho & Wong, 2001;Bujaki & McConomy, 2002;Akhtaruddin, 2005;Barako, 2007) relative to assessing the market valuation of such disclosures. The fifth motivation for this study is that market valuation studies in Nigeria focus more on financial statement numbers than on information provided by corporate governance disclosures, creating a gap in literature (Chukwu, 2017;Chukwu, Ugo & Osisioma, 2019;Ebirien, Chukwu & Abiahu, 2019;Chukwu, Ohaka & Nwanaynwu, 2017). ...
... Corporate governance disclosure is one important corporate governance mechanism recommended to reduce agency problems (Bushman & Smith, 2001;Core, 2001;Dye, 2001;Healy & Palepu, 2001;Jensen & Meckling, 1976). Disclosures have increased significantly due to increased uncertainties in the financial system and rising corporate misconduct as well as the fact that firms have realized the benefits of enhanced disclosure (Bujaki & McConomy, 2002). Corporate governance disclosure seeks to reassure the stakeholders that the reporting firm's corporate governance practices are in alignment with international and domestic best practices. ...
The paper examined how and to what extent market valued the disclosure of corporate governance practices by Nigerian Deposit Money Banks (DMBs). It extracted corporate governance and financial data from the annual reports of DMBs for the period of three years, 2013 to 2015 and constructed corporate governance disclosure index using content analysis method. Drawing from the Ohlson valuation model the paper stipulated an empirical model and ran an ordinary least square regression to test the null hypothesis formulated. The result showed that the market valued corporate governance disclosures of DMBs negatively.
Keywords: market valuation, deposit money banks, corporate governance disclosures, content analysis.
... Cooke and Wallace recommend that the entire corporate annual report should be reviewed first to identify whether a particular item is applicable or not, such that penalising a company by assigning a score of a 0 was avoided. This approach has been supported and used by other researchers (e.g., Bujaki & McConomy, 2002;Dawd et al., 2018;Garefalakis et al., 2016). ...
... The resulting scores from my content analysis are stored in an Excel file. It is common in the literature to use additive indices (e.g., Bujaki & McConomy, 2002). Thus, I first added the scores of those sub-information items which corresponded to a particular QC. ...
ABSTRACT
I have developed a Financial Reporting Quality (FRQ) measurement index within the scope of the 2018 Conceptual Framework for Financial Reporting of the International Accounting Standards Board (IASB), and I used it to measure FRQ of annual reports from Sri Lankan listed companies. My study is motivated by i) the seminal work of Beest, Braam, & Boelens (2009) who used Qualitative Characteristics (QCs) to measure FRQ, ii) the lack of a comprehensive measurement tool from which to quantitatively derive the degree an annual report complies with the postulated (by the IASB) characteristics of decision-useful information, and iii) the different classification interpretations of QCs and the inconclusive results about the perceived importance user groups ascribe to the QCs within decision usefulness theory: useful to whom and useful to make what decisions.
A first important realisation is that QCs and FRQ are latent constructs, which immediately suggest that the relationship between QCs and FRQ may be complex, non-linear and hierarchical. The process of developing the FRQ measurement index is then formulated through Research Question (RQ) 1, in which I use three steps. In Step 1, I searched the literature to identify measures for the QCs, and I obtained 54 so-called sub-information items under 17 information dimensions. In Step 2, I surveyed Sri Lankan investment (N=235) and lending (N=214) decision-makers on the usefulness of the identified sub-information items to their particular decision roles, and the respondents validated the selection identified in Step 1. In Step 3, the structural relationships between the 54 sub-information items, the 17 information dimensions, the 6 QCs and FRQ were tested by confirmatory factor analysis using SmartPLS. The factor analysis results revealed that the 54 sub-information items are measures of the 17 information dimensions and that they each factorise statistically satisfactorily with one of the 6 QCs.
The 2018 Conceptual Framework postulates a particular 2-group (fundamental and enhancing) classification the 6 QCs belong to. Thus, I tested the postulated classification and formed and tested 2 alternative models of how the 6 QCs affect FRQ. The results revealed that enhancing QCs affect FRQ indirectly through fundamental QCs, as postulated by the Conceptual Framework, but importantly they also make strong and significant direct contributions to FRQ. In particular, understandability has the highest direct contribution to FRQ from all 6 QCs. This finding challenges the IASB 2-group classification. A further utility of the 3 models, which in essence are variants of an FRQ measurement index, is the explicit relative contributions obtained that each of the QCs makes towards FRQ.
In supporting the development and validation of the FRQ measurement index, in RQ2, I also investigated several secondary research questions. I surveyed Sri Lankan investing (N=235) and lending (N=214) decision-makers to examine their use of annual reports, their perceived importance of QCs, and their perceived impact of International Financial Reporting Standards (IFRS) on FRQ. My results revealed that on average and ahead of ‘annual reports’, lending decision-makers rate highest ‘the direct communication with clients’, and investment decision-makers rank ‘stock market publications’ as the prime source for investment decisions; within annual reports, both types of decision-makers identified financial statements as the most useful sections and both groups stated that the main factor that restricts the usefulness of annual reports is the delay in publishing annual reports after year-end. When asked directly, both groups challenged the IASB’s current classification of QCs into ‘fundamental’ and ‘enhancing’, and both groups identified understandability as the most important QC, followed by timeliness. Relevance ranked sixth and last, surprisingly. These results complement the findings from RQ1. With respect to the impact of IFRS adoption in Sri Lanka in 2012, both groups believe that FRQ improved compared to the earlier Sri Lanka Accounting Standards (SLAS) reporting regime.
In RQ3, I also put in practice the derived FRQ measurement index by assessing the FRQ of annual reports of 53 listed Sri Lankan companies for the years 2010, 2014 and 2018. I find that Sri Lankan companies recorded on average an FRQ of 56% in 2010, rising to 61% in 2014 and to 66% in 2018. These differences are statistically significant, which allows me to conclude that the FRQ of Sri Lankan entities improved after IFRS adoption in 2012 compared to the period before adopting IFRS. This result complements the finding in RQ2. I identified that the total number of pages, the size of the firm as measured by total assets, and her market capitalization all positively correlate with the level of FRQ.
Through my work, I have made several useful contributions: I challenge the classification of QCs as fundamental and enhancing, which should also lead to a re-examination of the interpretation various authors of accounting textbooks give to this issue in the corresponding ‘IFRS and Conceptual Framework’ chapters; my results further challenge the widely held assumption that relevance and faithful representation rank supreme in the importance ranking among the 6 QCs; next, I provide numerical equations with which i) users can measure, i.e. calculate, FRQ and the change in FRQ over time, and ii) the IASB can measure to which degree their objective has been achieved of setting standards intended to improve the quality of decision-useful information for investors and lenders. While the processes for the derivation of an FRQ measurement index apply generally, the data have been collected and obtain within the Sri Lankan context. Thus, I invite other researchers to use, test and validate the measurement of FRQ in jurisdictions of their interest.
... However, most of the FLD is dominated by qualitative, nonfinancial, good news and one year forecasts (e.g., Bujaki and McConomy, 2002;Clatworthy and Jones, 2003;Wang and Hussainey, 2013). In this respect, Bujaki and McConomy (2002) found that 19.2% of information included in the Board of Director's and the MD&As for 46 Canadian companies are FLI, where most of the FLI is qualitative and nonfinancial. ...
... However, most of the FLD is dominated by qualitative, nonfinancial, good news and one year forecasts (e.g., Bujaki and McConomy, 2002;Clatworthy and Jones, 2003;Wang and Hussainey, 2013). In this respect, Bujaki and McConomy (2002) found that 19.2% of information included in the Board of Director's and the MD&As for 46 Canadian companies are FLI, where most of the FLI is qualitative and nonfinancial. They also observed that compared to bad news, favorable news constitute about 97.5%. ...
The empirical literature on the determinants of the disclosure of
forward looking information (FLD) offers mixed results. This hinders
stakeholders’ understanding of the factors affecting companies’ decision to
report FLD in the annual report narratives. Nonetheless, FLD is intended to
capture prospective performance information. However, the boilerplate,
storytelling, bias, and the auditing nature of FLD could impair its value
relevance. Therefore, this research aims to identify the main determinants of
FLD and its value relevance using an automated content analysis technique
for the measure of FLD. The research employs a sample of narrative sections
extracted from annual reports of 40 Egyptian listed companies for a nine year
time-period (2008 -2016). The final sample comprised 360 observations of
annual reports and two empirical regression models are used. FLD is
measured by the number of sentences coded as containing both forwardlooking
and financial Egyptian keywords. Value relevance of FLD is
measured by Tobin’s Q.
The study finds that FLD is positively associated with company size,
leverage, market risk, and industry type in terms of company characteristics
and with auditor type in terms of governance characteristics. However, it is
negatively associated with company’s dividend policy and competitiveness
level. This result adds to the validity of the FLD measure but suggests the
need for more enhancements in the Egyptian governance structure to
promote FLD publishing. The study also finds that FLD has market value
relevance. This suggests that the disclosure of forward looking financial
information should complement financial statements in Egypt. This also
implies that managers and regulators should consider more the economic
consequences of FLD and act on conveying transparent and prospective
information in an understandable and readable format for the stakeholders.
This research contributes to the accounting literature related to the
using of automated content analysis for investigating the characteristics of
narrative disclosure, particularly for an Arabic content using common
English software. This research also contributes to value relevance of
narrative disclosure in an emerging country; Egypt. The results also enrich
agency, signalling, stakeholders, cost of disclosures and dividend theories.
... From an agency theory perspective, to reduce opportunism and agency costs, and at the same time increase effective monitoring, boards should consist of a greater proportion of independent directors (Fama and Jensen, 1983;Shaukat et al., 2016). There are several studies that measure board independence and disclosure (Bujaki and McConomy, 2002;Parsa et al., 2007;Donnelly and Mulcahy, 2008;Persons, 2015;Wan Abdullah et al., 2015). Bujaki and McConomy (2002) find that firms with a majority of unrelated directors are significantly more likely to disclose more. ...
... There are several studies that measure board independence and disclosure (Bujaki and McConomy, 2002;Parsa et al., 2007;Donnelly and Mulcahy, 2008;Persons, 2015;Wan Abdullah et al., 2015). Bujaki and McConomy (2002) find that firms with a majority of unrelated directors are significantly more likely to disclose more. Donnelly and Mulcahy (2008) find that firms with more independent boards engage in greater voluntary disclosure than those with less independent boards. ...
Purpose
This paper aims to determine the role governance plays in the voluntary adoption of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Disclosure Standards by Islamic insurance (takaful) operators in the Southeast Asia (SEA) and the Gulf Cooperation Council (GCC) regions.
Design/methodology/approach
This study uses a sample of 44 takaful operators in the SEA and the GCC regions. While corporate governance (CG) strength is measured by the use of the frequently examined variables of the board of directors and audit committee, Shari’ah governance strength is measured by the characteristics of the Shari’ah Supervisory Board (SSB). Content analysis is used to extract disclosure items from the 2014 annual reports. Agency theory, stakeholder theory and political economy theory are argued to support the hypotheses.
Findings
The results show that CG strength has a positive and significant effect on the voluntary adoption of AAOIFI Disclosure Standards by takaful operators, indicating that CG plays an important role in the disclosure of information in the annual reports of takaful operators. However, the results show a lack of association between SSB strength and voluntary adoption of AAOIFI Disclosure Standards. Our results suggest that the SSBs may not be as involved as the other CG mechanisms (such as a board of directors and audit committees) in reviewing financial reports. On another note, the level of the political right and civil liberties has a negative and significant effect on the voluntary adoption of AAOIFI Disclosure Standards, providing an indication that stakeholders in a community with greater freedom tend to be more active in pressuring takaful operators to provide more information to justify their existence in the community. Similar to SSB strength, the legal system is also found to have no significant association with the voluntary adoption of the AAOIFI disclosure standards.
Practical implications
This study provides stakeholders with a tool to evaluate the effectiveness of the governance role in increasing the transparency of takaful operators by examining the governance factors using a self-constructed disclosure index.
Originality/value
Our study is among the first to provide an in-depth analysis of voluntary adoption of AAOIFI Disclosure Standards for takaful operators in these two regions; therefore, this study has implications for regulators and standard setters. The findings of this study are expected to provide information to regulators and standard setters on the role of governance in improving the transparency of takaful operators.
... Concerning the size of the firm, previous studies demonstrated the effect of this variable on the disclosure policies and, specifically, onthe quality and level of voluntary disclosure (Abdullah et al., 2015;Andrikopoulos et al., 2014;Bhasin et al., 2015;Bujaki & McConomy, 2002;Chow & Wong-Boren, 1987;Cooke, 1991;Depoers, 2000;Eng & Mak, 2003;Frías-Aceituno et al., 2014;Gul & Leung, 2004;Khan, 2010;Meek et al., 1995;Raffournier, 1995;Sharif & Rashid, 2014;Sierra-García et al., 2015). With particular reference to corporate governance disclosure, the existing contributions have concluded that firm size positively affects the amount of information disclosed by companies (Bujaki & McConomy, 2002). ...
... Concerning the size of the firm, previous studies demonstrated the effect of this variable on the disclosure policies and, specifically, onthe quality and level of voluntary disclosure (Abdullah et al., 2015;Andrikopoulos et al., 2014;Bhasin et al., 2015;Bujaki & McConomy, 2002;Chow & Wong-Boren, 1987;Cooke, 1991;Depoers, 2000;Eng & Mak, 2003;Frías-Aceituno et al., 2014;Gul & Leung, 2004;Khan, 2010;Meek et al., 1995;Raffournier, 1995;Sharif & Rashid, 2014;Sierra-García et al., 2015). With particular reference to corporate governance disclosure, the existing contributions have concluded that firm size positively affects the amount of information disclosed by companies (Bujaki & McConomy, 2002). In fact, this type of disclosure has a relevant role for large firms because they present more complex corporate relationships than small firms (Gandía, 2008). ...
In recent years, the debate on corporate governance has considerably grown worldwide. In this scenario, corporate governance disclosure is gaining greater attention and the advent of integrated reporting offers a new interesting channel to companies for the dissemination of corporate governance information.This study aims at investigating the factors that can affect the level of corporate governance disclosure included in the integrated reports. Our analysis, conducted on a sample of 85 international companies shows that firm size and profitability positively influence the level of corporate governance disclosure. Moreover, it demonstrates a negative impact of CEO duality on corporate governance disclosure level.
... Firm size: The empirical contributions in the literature show how the firm size represents a variable capable of explaining the political choices of disclosure, and specifically the quality and level of information provided voluntarily (Abdullah et al., 2015;Andrikopoulos et al., 2014;Bhasin et al., 2015;Bujaki & McConomy, 2002;Chow & Wong-Boren, 1987;Cooke, 1991;Depoers, 2000;Eng & Mak, 2003;Frías-Aceituno et al., 2014;Gul & Leung, 2004;Khan, 2010;Meek et al., 1995;Raffournier, 1995;Sharif & Rashid, 2014;Sierra-García et al., 2015). Larger companies are more likely to produce information and also incur lower costs due to economies of scale (Ben-Amar & Boujenoui, 2006;Gandia, 2008). ...
... Furthermore, larger companies are subject to greater public pressure and therefore must provide more information (Marrone & Oliva, 2019;2020;Vitolla et al., 2019c). The past contributions in the literature, in relation to corporate governance disclosure, have found a positive effect of the firm size on the amount of information provided by companies (Bujaki & McConomy, 2002). Therefore, in light of this, we introduce the following hypothesis: ...
In recent years, the analysis of corporate governance aspects is becoming a central element for understanding corporate dynamics and represents a clear indicator of investor confidence in the decisions taken by the management and board of listed firms. For this reason, corporate governance disclosure is receiving more and more attention from both a professional and academic point of view. The advent of integrated reporting represents a new tool for disclosing information relating to corporate governance. The goal of this study is to investigate the factors that can influence the level of corporate governance disclosure within the integrated reports. The analysis, conducted on a sample of 73 international firms, shows a positive effect of the firm size, firm profitability and audit quality. To our knowledge, this is the first study that analyses corporate governance disclosure level in the integrated reporting context.
... Tuy nhiên, theo quan điểm ngược lại, các công ty hoạt động kém cũng sẽ CBTT nhiều để giải thích về thực trạng công ty với cổ đông (Bujaki và McConomy,2002). Trên cơ sở đó, tác giả xây dựng giả thuyết H 4 ...
... 4. Ma trận hệ số tương quan giữa các biến với biến phụ thuộc CBTT ...
TÓM TẮT Bài báo trình bày nghiên cứu các nhân tố ảnh hưởng đến mức độ CBTT của DNNN ở Việt Nam. Tác giả đã xây dựng và kiểm định các nhân tố ảnh hưởng đến mức độ CBTT của DNNN, bao gồm: Quy mô doanh nghiệp, Đòn bẩy tài chính, Khả năng thanh khoản, Tỷ lệ ROE, Kiểm toán. Nghiên cứu sử dụng mô hình hồi quy bình phương nhỏ nhất, thông qua phần mềm SPSS 20 phân tích dữ liệu nghiên cứu của 152 DNNN. Kết quả cho thấy, Quy mô doanh nghiệp, Kiểm toán có quan hệ thuận chiều với mức độ CBTT; Đòn bẩy tài chính, Khả năng thanh khoản, Tỷ lệ ROE không ảnh hưởng tới mức độ CBTT của DNNN. Trên cơ sở kết quả nghiên cứu, tác giả đưa ra một số khuyến nghị nhằm nâng cao CBTT trong các DNNN ở Việt Nam. Từ khóa: CBTT; DNNN; phương pháp bình phương nhỏ nhất
ABSTRACT This article explores factors influencing the level of information disclosure by SOEs in Vietnam. These factors has been developed and tested the level of information disclosure of SOEs including enterprise size, financial leverage, liquidity, the ROE and auditing. This study used the least squares regression model, applying SPSS 20 software to analyze data of 152 SOEs. The research results has indicated that the size of enterprises and auditing are positively correlated with the level of information disclosure; Financial leverage, liquidity, ROE do not affect the level of SOE disclosure. Based on the results of the study, some suggestions were made to improve information disclosure in SOEs in Vietnam.
... Huang et al. (2018) examine EPRs found on PR Newswire. 1 Prior research has examined the IM practices of large corporations, particularly those based in the United States (Abrahamson and Amir 1996;Aerts and Yan 2017;Davis and Tama-Sweet 2012;Huang et al. 2014). Some prior research has also examined the disclosure practices of large Canadian firms-that is, those traded on the TSX (Bouaziz 2014;Bujaki and McConomy 2002;Ben-Amar et al. 2022). However, very little research has been done on corporations traded on the TSX-V. ...
This paper explores firms traded on the Toronto Stock Exchange (TSX) Venture Exchange and their voluntary disclosure practices by focusing on earnings press releases (EPRs). We compare the characteristics of EPR issuers and non‐issuers, and investigate how the former group uses headline impression management in their EPRs to highlight firm performance. More precisely, we examine emphasis and tone management techniques in the headlines of over 1,300 EPRs by TSX Venture Exchange firms. Our results show that the main determinants of the EPR disclosure choice are the achievement of positive revenue, an increasing trend in firm market value, and industry type. We find that EPR issuers reinforce and repeat positive results in the headlines of EPRs and use positive tone management to highlight positive financial performance. Our results confirm the association between firm performance and strategic placement of performance results, while illustrating that the strength of this association varies by industry and by EPR characteristics such as EPR length and numerical intensity. Overall, this paper sheds light on TSX Venture Exchange firms, their disclosure practices, and potential violations of recommendations from regulators regarding avoiding exaggerated or promotional language in press releases.
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... Therefore the main thrust of corporate governance is to ensure transparency, accountability and equity on the management of the resources as well as the appropriate reporting of such to the stakeholders. Accordingly, [2] opined that the whole essence of corporate governance is to ensure transparency, investor protection, full disclosure of executive actions and corporate activities to stakeholders, environmental impact assessment of corporate activities, assurance of performance related executive compensation and full disclosure of executive compensation. In view of the above, between 2007 ...
The relationship between corporate governance mechanisms and corporate performances is in focus in this study. The corporate governance mechanisms were proxied by board size, board composition and inclusion of independent directors in the board; while corporate performances were measured in terms of return on assets, return on equity and return on capital employed. Content analysis was used to extract the relevant indicators of corporate governance and corporate performances from financial statements of randomly selected manufacturing companies for period 2010 to 2017. The data were analysed using regression models. The results of the findings were mixed. A positive relationship was found to exist between board size and corporate performances while negative relationship existed between board composition and inclusion of independent directors and corporate performances. The study recommends among others that caution should be exercised in appointment of independent directors while board size should not be excessive.
... Empirical results from prior research have confirmed that voluntary disclosure reduces information asymmetry (Leuz and Verrecchia, 2000), cost of capital (Botosan, 1997;Botosan and Plumlee, 2002;Brown and Hillegeist, 2007) and increases stock price (Healy, Hutton and Palepu, 1999;Lang and Lundholm, 2000). Also, empirical findings have shown that determinants of voluntary disclosure include firm size (Depoers, 2000;Watson, Shrives and Marston, 2002;Kent and Ung, 2003;Eng and Mak, 2003;Huafang and Jianguo, 2007;Hossain and Hammami, 2009;Oliveira et al., 2011), international diversification (Raffournier, 1995;Depoers, 2000), ownership structure (Chau and Gray, 2002;Eng and Mak, 2003;Huafang and Jianguo, 2007;Wang and Claiborne, 2008), profitability (Watson et al., 2002;Wang and Claiborne, 2008), industry (Watson et al., 2002), board composition and independence of directors (Bujaki and McConomy, 2002;Patelli and Principe, 2007;Huafang and Jianguo, 2007), intention to improve stakeholder engagement (Boesso and Kumar, 2007) and intention to raise new share capital (Collet and Hrasky, 2005). ...
The aim of this thesis was to examine the extent to which risk information in the annual reports of banks reflects their future performance. Although research and recommendations have emphasised that risk disclosures should be informative, prior research has not arrived at any firm conclusions on the relevance of risk disclosures on bank performance. In the first paper, this thesis examined the extent of adumbrative risk reporting practice (i.e., vague, partial or circuitous disclosure prior to negative events) by banks. Using institutional theory and upper echelons theory to understand risk reporting practice by banks, an in-depth investigation was conducted on the annual reports of two UK resident banks that performed very differently during and after the global financial crisis.
This identified that adumbrative risk reporting was practiced more by the failed bank. Subsequently, the second paper examined the impact of risk reporting systems on bank performance. Using accounting and market based measures, the relationship of voluntary, adumbrative and mandatory risk disclosure practice were separately examined with performance of all UK resident banks during and after the financial crisis. Panel data regression analysis was used. While no relationship was found between adumbration and performance, the results showed that mandatory risk disclosure negatively affects performance while voluntary risk disclosure positively affects performance. The researcher found less disclosure on securitisation activity after the financial crisis. Financial leverage was negatively related to bank performance, while the number of board sub-committees and income diversity were found to be positively related to bank performance. The differences in the risk reporting practices of banks within the same environment led to the quest to examine the variability of risk disclosure practice across banks resident in different cultural environments. Hence, the third paper examined the impact of national cultural dimensions on risk reporting transparency of European banks. Using voluntary disclosure theory and national culture theory as respective guides to understanding risk reporting transparency and national cultural dimensions, a longitudinal analysis was conducted of the risk information provided in annual reports of European banks prior to actual adverse events. These results were compared with uncertainty avoidance, power distance and long term orientation cultural dimensions using weighted least square regression analysis. The results showed that while uncertainty avoidance was negatively related to risk reporting transparency, power distance was positively related to risk reporting transparency. The thesis contributes to risk disclosure research, particularly in the banking industry, by highlighting the need to study (a) adumbrative risk reporting, (b) the potential drawbacks of categorised risk disclosure regulations, and (c) national cultural differences in order to better understand the variability in risk disclosures relating to actual events at banks. This thesis also demonstrates that valuable risk information (related to bank specific circumstances) can be identified using qualitative content analysis which otherwise may be neglected with the use of quantitative content analysis as used in prior studies. With this, several evidence informed recommendations have been developed for better risk disclosure practices.<br/
... Prior research finds the following in terms of the types of forward-looking information. Bujaki and McConomy (2002) describe the nature of forward-looking information published in the chairmen statements and the MD&A for 46 Canadian companies. They find that 19.2% of information included in the chairmen statements and the MD&A is forward-looking. ...
Forward-looking financial disclosure (FLFD) is potentially uninformative if it does not change from the previous year, especially after a significant change in firm performance. This study uses a sample of UK narrative statements of the annual reports over the period from 2005 to 2011. It employed the automated content analysis technique to measure change in FLFD over years to answer three research questions. First, to what extent does change in firms’ earnings performance drive managers to change FLFD over years? Second, what are the other drivers of the change of FLFD from year to year? Third, do investors use information revealed by the change in FLFD?
The study finds a positive association between change in FLFD and change in firm earnings performance. However, it finds weak evidence that firms with larger changes in their earnings performance are likely to change their FLFD more than those with smaller performance changes. In addition, when we distinguish between well-performing and poorly performing firms, it finds that the change in FLFD is more positively associated with poorly performing firms compared to well-performing firms.
Furthermore, it finds that change in FLFD is positively (negatively) associated with firm size, (competitive environment), (litigious environment), and (percentage of managerial ownership). In addition, the role of the auditor in overseeing narrative reporting is not appearing for all sample firms or for well-performing firms, however, it is observable only in poorly performing firms.
Finally, the study uses firm value three months after the release of the annual report to examine investors’ responses to the changes in FLFD. It finds that the value of a firm decreases as long as it changes its FLFD from the previous year. However, when we distinguish between well and poorly performing firms, it finds that the change in FLFD has no effect on the value of well-performing firms, while, it negatively affects poorly performing firms.
The results suggest that FLFD in UK narratives includes some content about firm performance. However, it neither affects the value of well-performing firms nor enhances investors’ valuation of poorly performing firms.
... It is also argued (Wallace and Naser, 1995;Meek, et al., 1995) that well performed companies are expected to disclose more information about their performance. Bujaki and McConomy (2002) show that firm facing a slowdown in revenues tends to increase their disclosure of corporate governance practices. Moreover, firms suffering serious corporate governance failures tend to provide extensive disclosure of governance guideline implemented in the period after such failures. ...
This research aims to test empirically the relationship between the Financial Performances (Profitability) and the level of Corporate Governance Disclosure (CGD) by the listed non-financial companies in Bangladesh. Data are taken from annual reports of the listed companies in the 2007. This paper is based on a sample of 94 listed companies and Used OLS as a method of estimation. The extent of corporate governance disclosure level is measured using 40 items of information and financial performance (profitability) is measured by return on assets (ROA). Using an unweighted approach for measuring corporate governance disclosure, this approach is most appropriate when no importance is given to any specific user-groups. After establishing the disclosure index, a scoring sheet was developed to assess the extent of corporate governance disclosures. The result shows that the level of Corporate Governance Disclosure (CGD) is positively correlated with the Financial Performances (Profitability).The study provides empirical evidence to policy makers and regulators in South Asia.
... Apostolos and Konstantinos (2009); Karim (1996); Samir et al. (2003) and Meek et al.(1995) suggest that profitability of the companies is expected to disclose more information about their performance. Bujaki and McConomy (2002) show that firm facing a slowdown in revenues tends to increase their disclosure of corporate governance practices. Moreover, firms suffering serious corporate governance failures tend to provide extensive disclosure of governance guideline implemented in the period after such failures. ...
Abstract
Purpose – This paper aims to examine the factors affecting the voluntary disclosure in the annual reports of
listed companies in Bangladesh.
Design/methodology/approach – The study is based on a sample of 96 listed non-financial companies
in Dhaka Stock Exchanges over the period of 2013 to 2016. The study used partial least squares structural
equation modeling tool to analyze data which provides evidence of reliability and validity. It also used an
unweighted relative disclosure index for measuring voluntary disclosure.
Findings – The empirical results show that corporate governance (board leadership structure and
ownership structures) and firms characteristics (total assets and total sales) are significantly positive
correlated with the voluntary disclosure.
Originality/value – The finding of the study will be a bench mark or the board for policy makers and
implementers in torching the avenues of improvement in raising the level of corporate voluntary disclosure in
annual reports of listed companies in Bangladesh.
Keywords Structural equation modelling, Corporate governance, Voluntary disclosure,
Dhaka stock exchanges
... Besides that, most of the voluntary disclosure information can be access through annual reports, corporate websites and management information (Wang, Sewon & Claibrone, 2008;Bujaki & McConomy, 2002). Interestingly, the more excessive information to the public shows that how responsible of the company to its shareholders. ...
Annual general meeting or known as AGM as the place for the management and shareholders to sit together to discuss the company with the objective of profit maximization and to promote organizational accountability. Based on the observation from a period of 2012 to 2017, the disclosure of AGM minutes on the corporate website increase over the year. However, the number is still below 50% in overall Malaysian public listed companies. This paper aims to highlight the importance of AGM minutes as one of the key success factors toward good governance. Based on this paper, the management of the company such as the board of directors, the company secretary, and related parties will take the initiative to publish good quality of AGM minutes as a panacea toward good governance.
... The literature largely deals with transparency by scrutinizing specific leading interests in communicating corporate activities, such as trust building (Perotti and Von Thadden, 2005), impacts on dominant investors (Pirson and Malhotra, 2011) or the creation of a candid corporate culture (Serpa, 1985). Meanwhile, corporate transparency is taking on a new meaning of more extensive and proactive disclosure, which goes beyond mandatory corporate details (Bujaki and McConomy, 2002;Li, 2010). ...
Large firms operating in underdeveloped institutional environments of transition economies tend to invest in seemingly unrewarded corporate social responsibility (CSR) initiatives. To explain this phenomenon, we extend the literature on the motives behind CSR disclosure in agribusiness from the institutional perspective on organizational legitimacy. The thesis is that self-interest rationales for CSR disclosure, as advocated by the strategic-legitimacy perspective, fall short of explaining the full scope of instrumental motivations for the proactive and excessive transparency initiatives of agribusiness companies. Using the example of internationally listed Ukrainian agroholdings, we show that firms faced with institutions that do not appropriately support access to market transactions not only adapt to fluctuations in the business environment but also proactively address key institutional bottlenecks by engaging in higher transparency and nonmarket initiatives. The case study analysis of the voluntary CSR disclosure of four agroholdings is conducted based on in-depth interviews with corporate managers and complemented with information from corporate reports and websites. This analysis offers insights into the development of corporate farming and its economic and social repercussions in Ukraine and, more generally, expanding the concept of CSR itself.
... For decades, there have been concerns that the tax-exempt status of some charitable organizations may have been used for tax avoidance or abused for other purposes [56,57] because agency problems have always been major concerns about their governance. CFs by legal requirement have no owner of profits, and the residual claimants are either unable to monitor efficiently or unwilling to do so [25,58]. ...
Tax exemption plays an important role in the sustainability of charitable organizations (COs). The 2016 Charity Law of China provides stronger tax incentives for charity donations. Using 767 observations of Chinese charitable foundations (CFs) during 2010–2018 from the China Foundation Center database and manually collected tax-exempt status data, this study applies multivariate logistic regression analysis to examine the association between tax-exempt status and related key factors, such as transparency and donation dependency. This study found that a one-point increase in the transparency score of a CF is associated with a 3.9 percentage points higher likelihood of having at least one type of tax-exempt qualification (OR = 1.039, p < 0.01). There is in general a significantly positive association between tax-exempt status and donation dependency of CFs in China. After 2016, the CFs responded actively to the tax incentive provided by the Charity Law, which in return requires a higher level of transparency. These results suggest that taxation under the legal system may effectively function to promote the sustainability of charity foundations in China in the long run. Further studies are needed to explore in-depth why CFs with advanced tax-exempt qualifications concentrate in Beijing and Shanghai.
... The internal control and audit system contribute to businesses' success [34]. Companies, which usually suffer a decline in their financial performance, enlarge their publication to embrace a wider spectrum of extra financial information and CG criteria [35]. Thus, our second hypothesis is as follows: H2: The credibility of accounting, the external audit and internal control and financial performance are related. ...
Opaque markets suffer from asymmetry of information and inaccessibility to financial data. SMEs operating in such markets play an important role and substantially contribute to their economy. Evaluating SMEs financial performance for such markets remains a hard task and hence such sector is completely marginalized. This paper attempts to proxy the financial performance by gathering a bundle of qualitative traits that play a mediating role towards financial performance. We support our study by identifying three specific areas that best describe SMEs internal capabilities and environmental conditions. We measure a score, validate it and use it to proxy SMEs financial performance in Lebanon. We find a positive relationship between the score and return on investment (ROI) and return on assets (ROA), which support our hypotheses.
... The internal control and audit system contribute to businesses' success (Tumwebaze et al. 2018). Companies which usually suffer a decline in their financial performance enlarge their publication to embrace a wider spectrum of extra financial information and CG criteria (Bujaki and McConomy 2002). To integrate the effect of such variable in our model, we attempt to measure the above-mentioned components: internal control framework, efficient accounting system, and independent external audit. ...
This paper aims to empirically examine the link between corporate governance and the financial performance of small and medium enterprises (SMEs) in Lebanon. To this end, we use a questionnaire and collect data from a sample of 150 non-listed companies. The Bundles approach following R. Aguilera et al. (2008 Aguilera, R. , I.Filatotchev, H.Gospel, and G.Jackson . 2008. “An Organizational Approach to Comparative Corporate Governance: Costs, Contingencies, and Complementarities.” Organ. Sci. 19: 475–492.[Crossref], [Web of Science ®] , [Google Scholar]). ‘An Organizational Approach to Comparative Corporate Governance: Costs, Contingencies, and Complementarities.’ Organization Science 19: 475–492.) is used to construct a corporate governance score based on three main components. By applying 2SLS regression to control for endogeneity and a quantile regression, we study the impact of corporate governance (CG) score and each of its components on the financial performance (FP) measured by return on assets (ROA) and return on investment (ROI) while controlling for SMEs age, size, and industry. The study indicates positive interdependency between CG and FP. Effective CG results in increased FP and better performing companies tend to improve their CG). Interestingly, our results show that this relationship depends on the level of SMEs FP These findings provide managers with useful insights and serve as an underpinning for more regulatory efforts aimed at strengthening the CG of SMEs in Lebanon.
... Apostolos, K. et al., (2009 (1995) suggests that profitability of the companies is expected to disclose more information about their performance. Bujaki and McConomy (2002) show that firm facing a slowdown in revenues tends to increase their disclosure of corporate governance practices. Moreover, firms suffering serious corporate governance failures tend to provide extensive disclosure of governance guideline implemented in the period after such failures. ...
Corporate governance and corporate disclosure is an important issue now-a-days. In India, a number of attempts have
been made on part of different governmental and non-governmental institutions for ensuring better corporate
governance as a mandatory disclosure. On other hand corporate disclosure are the disclosure made by the firm
voluntarily to increase transparency in the management of the firm. This research is an extension of previous research
where a set of variables is considered to examine their association with the level of corporate disclosure. The objective of
this study is to examine firm characteristics and their influence on corporate disclosure. These factors include Age of the
Firm, Listing Status of the Firm, Ownership Structure of the Firm, Leverage of the Firm, Size of the Audit Firm,
Residential Status of the Firm, Size of the Firm and Profitability of the Firm. In particular, the study aimed to determine
which of these factors were significantly related to increased corporate disclosure. The study used the disclosure index to
measure corporate disclosure on a sample of 45 listed non financial firm of India. The study is based on sample of NSE
50 firms for the period of 2008-09 to 2010-11. An unweighted disclosure index with 74 reporting items were applied to
sample firms. In the paper an attempt has been made to examine the quantum of corporate disclosure and its relationship
with corporate characters such as size, profitability, leverage, listing status, shareholding pattern, audit firm,
residential status of a firm, and age of the sample companies. To measure the association between the variables of the
study pearson correlationmatrix was used. The results of the study indicate that the extent of corporate disclosure within
the sample firm varies within 15% to 75% (approximately) for the period of study. It implies that though all the firms
disclose mandatory information as required by law, but at the same time, a large number of firms disclose more than
required by legal provisions. These firms are globally recognized and have overseas operations too. These firms are also
known for maximization of the shareholders wealth. That is why these companies try to be more transparent in the eyes of
domestic as well as foreign investors and have better disclosure level. It has also been observed that the extent of
corporate disclosure is influenced by listing status of the firm, ownership structure, leverage of the firm, size of the audit
firm, size (as measured by total assets, sales and market capitalization), and profitability (as measured by return on
capital employed). The companies with large assets size, higher profitability, higher leverage, listing in foreign stock
exchanges, lower holding of promoters share and audited by big audit firms have tendencies to be more transparent and
hence disclose more information. However, age of a company and residential status do not significantly influence the
level of corporate disclosure.
... To examine the CSR disclosure by takaful companies, the content analysis method will be used. Bryman and Bell (2003) define content analysis as a method that involved a process of analysing documents and texts to quantify the content in terms of predetermined categories in a systematic and replicable manner. This method is deemed to be appropriate since most of the previous studies on disclosures by IFIs have adopted this method (Harahap, 2003;Maali, et al., 2006;Haniffa and Hudaib, 2007). ...
Corporate Social Responsibility (CSR) refers to a company's voluntary contribution to sustainable development which goes beyond legal requirements. Currently, companies apply excessive distribution of effort on CSR disclosures. CSR disclosure relates to the provision of information on companies' environmental and social performance. This research aims to identify the CSR disclosure by Islamic insurance (takaful) companies in the Southeast Asia (SEA) and the Gulf Cooperation Council (GCC) regions. This study examines whether there is a difference between the SEA and GCC regions, in relation to the voluntary disclosure of the GSIFI No 7: the Corporate Social Responsibility Conduct and Disclosure for Islamic Financial Institutions. The primary objective for this standard is to ensure that CSR activities and compliance of IFIs are communicated in a truthful, transparent and comprehensible manner to relevant stakeholders. This study uses a sample of 55 takaful companies in the SEA and the GCC regions. Content analysis is used to extract disclosure items from the year 2014 annual reports of takaful companies. The results show that there is a significant difference in the extent of CSR disclosure between takaful companies in the SEA and the GCC region. The findings reveal that takaful companies in the GCC region disclose more compared to the SEA region.
... To examine the CSR disclosure by takaful companies, the content analysis method will be used. Bryman and Bell (2003) define content analysis as a method that involved a process of analysing documents and texts to quantify the content in terms of predetermined categories in a systematic and replicable manner. This method is deemed to be appropriate since most of the previous studies on disclosures by IFIs have adopted this method (Harahap, 2003;Maali, et al., 2006;Haniffa and Hudaib, 2007). ...
... Cerf finds that there is a positive relation between disclosure and number of shares. Prior research (Lang and Lundholm, 1993;Frankel et al., 1995;Bujaki and McConomy, 2002;Collet and Hrasky, 2005) suggests that companies planning to issue new equity during the coming year should increase their disclosure level to reduce information asymmetry with external investors and reduce financing costs. Collett and Hrasky (2005) find a positive association between voluntary disclosure & governance practices and the intention to raise equity capital in Australia. ...
This paper studies the behaviour of consumers in Bhopal city with respect to online shopping. The variables included are familiarty with online shopping, familiarty with specific websites engaged in e-retailing, purchased products from these websites etc. Data is collected directly by interviewing the respondents according to a self-constructed schedule. Random sampling technique is applied for gathering the data. Data analysis and statistical testing is performed with the help of SPSS 16.0 and MS-Excel 2007 softwares. Results answer the questions like, how consumers are aware of online shopping method?, how they use to purchase?, what online shopping websites are chosen?, what kind of products are purchased? etc.
... Besides that, most of the voluntary disclosure information can be access through annual reports, corporate websites and management information (Wang, Sewon & Claibrone, 2008;Bujaki & McConomy, 2002). Interestingly, the more excessive information to the public shows that how responsible of the company to its shareholders. ...
Annual general meeting or known as AGM as the place for the management and shareholders to sit together to discuss the company with the objective of profit maximization and to promote organizational accountability. Based on the observation from a period of 2012 to 2017, the disclosure of AGM minutes on the corporate website increase over the year. However, the number is still below 50% in overall Malaysian public listed companies.
... It means that independent director has an important contribution in improving managerial quality and decisions [11] because the supervision influences management decisions including in determining the transparency of information that will be carried out by the company. Ben-Amar and Boujenoui [37]; Bujaki and McConomy [38]; Parsa, et al. [39]; and Samaha, et al. [40] find that there is a positive relationship between the independence of the board of director and corporate governance reporting which is one type of information that needs to be disclosed by the company as a form of transparency to stakeholders. Other studies such as Chen and Jaggi [41] did not find that the independence of the board of director will increase the monitoring ability of the board of director, so that the presence of an independent board of commissioners does not affect the company's transparency in implementing the disclosure framework. ...
... The diversity disclosures of companies on the S&P/TSX60 index (''TSX60 companies") are analyzed as representing public companies with the largest market capitalizations in leading industries in Canada (see Appendix, Panel A for a list of companies on the TSX60 and some key characteristics of their diversity disclosures). These companies are frequently at the forefront in terms of Canadian corporate governance practices and often set the tone for other companies in their disclosures (Bujaki & McConomy, 2002). A random sample of 60 other Non-TSX60 companies is also analyzed to increase the generalizability of the results (see Appendix, Panel B for a list of Non-TSX60 companies analyzed). ...
The diversity disclosures by Canadian corporations are examined to show how references to ‘merit’ and ‘diversity’ are used strategically by many corporations to support the gendered status quo and to resist pressures to increase the representation of women on boards. References to ‘merit’ and ‘diversity’ in the first mandatory corporate governance diversity disclosures of a sample of corporations from the Toronto Stock Exchange are analyzed using critical discourse analysis to assess the extent to which these disclosures are used to legitimize current board recruitment practices and to maintain the gendered status quo. We find that corporations referring to merit in their disclosures tend to have fewer women directors than corporations that do not mention merit. In addition, we assess the readability of the disclosures. We find that those referring to merit tend to be less readable, suggesting efforts to obfuscate. This research highlights the patriarchal power structures underlying corporate board appointments and shows how these power relationships are revealed in the language corporations choose to use in their diversity disclosures. ‘Gender’, ‘diversity’ and ‘merit’ are socially constructed concepts. Until the gendered roots of the language of merit-based policies are acknowledged, corporations have little incentive to challenge the status quo and engage substantively with diversity. Overcoming corporate resistance to change may require a range of innovative practices by corporations and regulators, up to, and possibly including, mandating levels of women’s representation on corporate boards.
... Masalah yang kadang muncul karena perilaku pasar tidak semata-mata melihat pengungkapan GCG sebagai salah satu faktor akan tetapi bisa faktor lain yang mendorong naiknya nilai perusahaan. Dalam penelitian Bujaki dan McConomy (2002) mengungkapkan hubungan antara pengungkapan Corporate Governance dan kinerja perusahaan-perusahaan di Canada. Dengan menggunakan pendapatan sebagai alat ukur kinerja penelitian tersebut mengungkapkan kalau pendapatan perusahaan menurun seriring dengan menurunnya pengungkapan praktek Corporate Governance dan sebaliknya dengan meningkatnya pengungkapan Corporate Governance pendapatan perusahaan cenderung akan meningkat. ...
Several researches were conducted to explain the financial statement disclosure categorized in to the disclosure research in general and the research examining disclosure of specific aspect, such as the research explaining the effect of Good Corporate Governance (GCG). This research aims to examine the disclosure on specific aspect, voluntary disclousure of GCG in annual report and the relation between the amount of Board of Commissioners and firm value. The population in this research is the manufacturing company registered in Indonesia stock exchange in 2015, in which there are 53 companies as the samples of research. The hypothesis testing was performed with path analysis. The research shows the result that there is significant positive effect in amount variable of Board of Commissioners on the voluntary GCG disclosure and there is no indirect rela tion of Board of Commissioners variable on firm value through voluntary GCG disclosure. PENDAHULUAN Perkembangan lingkungan bisnis yang terus berubah mendorong pertumbuhan bis nis yang ada dan tentunya pertumbuhan tidak lepas dari investasi dari waktu ke waktu untuk mengembangkan usaha. Peran investor dalam mendorong pertumbuhan bisnis menjadi penting di perusahaan yang go public, oleh karena itu penting bagi investor dalam memutuskan di perusahaan mana investasi akan dilakukan dengan mempertimbangkan informasi internal perusahaan dan eksternal perusahaan. Penyajian informasi di pasar menjadi peranan penting bagi perusahaan untuk menarik investor melakukan investasi oleh karena itu pengaturan mekanisme investasi dari waktu ke waktu diperbaharui, termasuk diantaranya kewajiban menyajikan laporan keuangan yang telah diaudit oleh Kantor Akuntan Publik yang independen dan berbagai aturan tentang pengungkapan yang bersi fat wajib maupun sukarela di pasar saham. Berbagai penelitian telah dilakukan untuk menjelaskan pengungkapan laporan keuangan. Penelitian tersebut dapat dikelompokkan menjadi penelitian yang meneliti pengungkapan secara umum (voluntary dan atau mandatory) maupun penelitian yang meneliti pengungkapan di aspek khusus seperti penelitian yang menjelaskan akan dampak pengungkapan laporan keuangan terhadap berbagai perilaku pasar atau kejadian ekonomi, pengungkapan tanggungjawab sosial perusahaan, aspek-aspek keuangan dan lingkungan hidup.
... Bowen et al. (2008) reported that independent directors are more effective in discouraging managers from engaging in earnings management. Bujaki and McConomy (2002) found that firms with more unrelated directors are more likely to disclose corporate governance information. Kesner et al. (1986) found that although independent directors are not involved in illegal acts, adding outside independent directors cannot lessen a firm's illegal acts. ...
The study of internal corporate governance mechanisms such as board characteristics plays a crucial role in explaining the variations in corporate governance and disclosure practices across firms. The effectiveness of such corporate governance mechanism in maintaining healthy relationship between the management and the shareholders depends significantly on board effectiveness. Two major attributes that affect a board's effectiveness are board size and its composition. Board size refers to the total number of directors who sit on the board of a company, while board composition refers to the type of directors on the board. This paper focuses on this aspect and identifies the relationship between board characteristics, i.e., board size and board composition and corporate governance and disclosure practices of firms listed in the Bombay Stock Exchange (BSE).
... Voluntary disclosure used to signal companies responses to changes in the business environment. Besides that, the voluntary disclosure in the annual reports and management information guided shareholders to assess the importance and effectiveness of each firm's corporate governance system (Bujaki & McConomy, 2002;Abdur Rouf, 2011;Lokman, Mula, & Cotter, 2014). In general, disclosure information in corporate annual report comprises of mandatory information and voluntary information. ...
The research on voluntary disclosure among developed and developing countries has established a number of increasing studies. However, most of the researchers focus on the factors and determinants of voluntary disclosure. Besides, there is little known on the study on voluntary disclosure involving annual general meeting (AGM) minutes among publicly listed companies.
... Prior studies on voluntary disclosure tend to focus on the reporting of financial ratios (Mitchell 2006;Watson et al. 2002) and management earnings forecasts ( Ajinkya et al. 2005;Karamanou & Vafeas 2005). Another group of studies examines voluntary disclosure of non- financial information, which specifically looks at disclosure of corporate governance information (Bujaki & McConomy 2002;Collett & Hrasky 2005;Lokman et al. 2011); reporting on internal risk management and control systems ( Bronson et al. 2006;Deumes & Knechel 2008); employee stock options disclosures ( Bassett et al. 2007); environmental and corporate social responsibility reporting ( Clarkson et al. 2008;Dhaliwal et al. 2009; ) in annual reports; and a firm's website and separate documents accompanying annual reports, such as sustainability reporting. Research on non-financial information which focus on strategic information has obtaining escalating attention, however, there is limited study that focused on both strategic and forward looking information in annual reports ( Liu 2015;AlKhatib 2014;Hashim et al., 2014;Alves, Rodrigues & Canadas 2012). ...
Strategic and forward looking information (VDSFLI) is important to the stakeholders of the company because it provide strategic plan and future direction of the company. This study aims to examine the relationship between corporate governance mechanisms and VDSFLI. The VDSFLI is measured by using a disclosure index checklist of 36 items. For each item a score is awarded based on the disclosure made by the companies in annual reports. All data is collected from the annual reports of 230 public listed Malaysian companies. The findings of the study revealed that size of audit committee is positively and significantly influence the level of VDSFLI. While the other corporate governance mechanisms are not associated with the level of VDSFLI. The study provides evidence in support of the size of audit committee requirement of Regulatory Framework in Malaysia. This evidence contribute to the argument on the role of audit committee in reducing agency conflict and minimise information asymmetry problem which results in high level of VDSFLI. In addition, the bigger the size of audit committee the better because it would provide positive signal that company has in place an effective governance mechanism as a check and balance which encourage voluntary disclosure practices. It also provide direction to the preparers of the annual report to fully disclose the information voluntarily. This study bridges the gap in the literature of corporate governance by specifically focuses on VDSFLI practices in Malaysia context.
... Prior studies on voluntary disclosure tend to focus on the reporting of financial ratios (Mitchell 2006;Watson et al. 2002) and management earnings forecasts (Ajinkya et al. 2005;Karamanou & Vafeas 2005). Another group of studies examines voluntary disclosure of nonfinancial information, which specifically looks at disclosure of corporate governance information (Bujaki & McConomy 2002;Collett & Hrasky 2005;Lokman et al. 2011); reporting on internal risk management and control systems (Bronson et al. 2006;Deumes & Knechel 2008); employee stock options disclosures (Bassett et al. 2007); environmental and corporate social responsibility reporting (Clarkson et al. 2008;Dhaliwal et al. 2009; ) in annual reports; and a firm's website and separate documents accompanying annual reports, such as sustainability reporting. Research on non-financial information which focus on strategic information has obtaining escalating attention, however, there is limited study that focused on both strategic and forward looking information in annual reports (Liu 2015;Al-Khatib 2014;Hashim et al., 2014;Alves, Rodrigues & Canadas 2012). ...
Strategic and forward looking information (VDSFLI) is important to the stakeholders of the company because it provide strategic plan and future direction of the company. This study aims to examine the relationship between corporate governance mechanisms and VDSFLI. The VDSFLI is measured by using a disclosure index checklist of 36 items. For each item a score is awarded based on the disclosure made by the companies in annual reports. All data is collected from the annual reports of 230 public listed Malaysian companies. The findings of the study revealed that size of audit committee is positively and significantly influence the level of VDSFLI. While the other corporate governance mechanisms are not associated with the level of VDSFLI. The study provides evidence in support of the size of audit committee requirement of Regulatory Framework in Malaysia. This evidence contribute to the argument on the role of audit committee in reducing agency conflict and minimise information asymmetry problem which results in high level of VDSFLI. In addition, the bigger the size of audit committee the better because it would provide positive signal that company has in place an effective governance mechanism as a check and balance which encourage voluntary disclosure practices. It also provide direction to the preparers of the annual report to fully disclose the information voluntarily. This study bridges the gap in the literature of corporate governance by specifically focuses on VDSFLI practices in Malaysia context.
... There are major concerns about agency problem [2] among the CFs too, because usually owners of CFs are not welldefined and the residual claimants are either unable to monitor efficiently or unwilling to do so [3] [4]. Also due to asymmetry information, the public can hardly get access to the internal information of foundations to monitor the CFs. ...
The study sought to establish the influence of corporate governance on internet financial reporting in Malawi using the cross-sectional time horizon design. Sixteen companies listed under the Malawi Stock Exchange and forty registered limited companies that were operational but not on the Malawi Stock Exchange with a minimum of total assets of MWK 300,000,000.00 constituted the population. The sample was limited to 50 companies of which 43 had their financial reports available on the internet, which was the source of data. Content validity was achieved through consultation with experts in the field of accounting and financial reporting. Data was analyzed through multiple regression analysis using the SPSS Software. The study established that corporate governance mechanisms did not influence the timeliness of corporate Internet Financial Reporting. However, ownership structure positively influenced the corporation to engage in the Internet Financial Reporting. Furthermore, decision usefulness positively influenced the corporations to engage in the Internet Financial Reporting. Therefore, for the companies to engage in internet financial reporting, there is a need to ensure that decision usefulness is maximized. Furthermore, there is a need to ensure a maximized ownership structure for the organizations to keep engaging in the Internet Financial Reporting.
The main purpose of the study is to know the impact of company characteristics on Human Resource Disclosure Index (HRDI) in service sector companies in India. The sample consists of 22 service sector companies listed on the NSE-500 Index. The data of dependent variable are collected from annual reports using the content analysis approach, and the data of independent variables are collected from CMIE Prowess Database and annual reports of the sample companies. The time period of the study ranges from 2012–13 to 2017–18. For analysis, descriptive statistics, Pearson’s correlation matrix and One-way Least-Square Dummy Variable (LSDV) regression model are used. The findings of the study show that the mean percentage of HRDI is 34.26. It represents the low level of HR disclosure. Further, the results of the LSDV regression model demonstrate that net fixed assets, market capitalization, return on total assets, quick ratio and pages of an annual report have significant positive and net sales, profit after tax, current ratio and type of auditor have significant negative influence on the HRDI. Overall, it can be said that the HRDI used in the present study is a first step towards evaluating the voluntary HR disclosure practices of listed companies in India from the stakeholder perspective and voluntary disclosure of HR information help to rebuild the trust of stakeholders in an accounting system.
Bài viết đánh giá mức độ và các nhân tố ảnh hưởng đến mức độ công bố thông tin (CBTT) bắt buộc trong báo cáo tài chính (BCTC) giữa niên độ của các công ty đại chúng chưa niêm yết (CTĐCCNY) ở Việt Nam. Kết quả nghiên cứu cho thấy mức độ CBTT trong CBTC giữa niên độ của các công ty này ở mức thấp. Kết quả nghiên cứu cũng ghi nhận được ảnh hưởng của quy mô doanh nghiệp (DN), mức độ sinh lời, đòn bẩy tài chính và chủ thể kiểm toán đến mức độ CBTT này. Từ đó, bài viết đề xuất một số kiến nghị nhằm cải thiện mức độ công bố thông tin này. Kết quả nghiên cứu này góp phần giúp các cơ quan quản lý rà soát và hoàn thiện các quy định về CBTT trong BCTC giữa niên độ nhằm thúc đẩy sự minh bạch của của thị trường chứng khoán (TTCK). [This research evaluates the levels of mandatory disclosure in interim financial statements by unlisted public companies in Vietnam and influencing factors. The study documents that the disclosure level in those reports is still low. The research results also reveal the influence of firm size, profitability, financial leverage, and auditor on mandatory disclosure levels in interim reports by Vietnamese unlisted public companies. The results of this study assist regulators in reviewing and improving regulations on interim reporting disclosure to promote the transparency of the stock exchange]
Responding to the calls for empirical research on the extent and nature of business model reporting, this paper has the purpose to assess the quality of busi-ness model disclosure. To accomplish this purpose, the study takes advantage of an interventionist research project that was conducted in an Italian listed compa-ny operating in the information technology industry to investigate how the busi-ness model was disclosed in the annual report and provide feedback to support possible changes. The study uses a framework of analysis that helped to assess the quality of business model disclosure in terms of three attributes: amount, spread and connectivity. The annual report of two consecutive fiscal years was analyzed. The study mainly shows that the measurement and assessment of BM disclo-sure quality can facilitate its improvement. The analysis enabled meaningful in-sights on BM's quality to emerge, delivering evidence on the relative importance, coverage and interconnections of BM's disclosed components. Further, the inter-ventionist approach helped to shape managers' view on how to tackle disclosure issues and offer more effective communication of the BM according to the com-pany purposes.
Corporate disclosure is a key mechanism of corporate governance. This study examined the effect of corporate governance disclosure (CGD) on the financial performance of commercial banks listed on the Nigeria Stock Exchange. Based on the provisions of the Code of Corporate Governance for Public Companies in Nigeria, 2011 and the Code of Corporate Governance for Banks and Discount Houses 2014, the study developed a disclosure checklist and employed content analysis technique to extract corporate governance (CG) from 78 annual reports of 13 Nigerian commercial banks from 2011 to 2016. The study trichotomized CGD into those relating to the board of directors, risk framework, and whistleblowing policy. The results of the hypothesized relationships showed a positive and significant association between CGD and the banks' financial performance, with a positive effect of CGD on the board of directors and whistleblowing policy. However, the study did not find a significant association between CGD of risk management framework and the banks' financial performance. This study contributes to the body of knowledge by providing a broader understanding of the effect of CGD on banks' financial performance. The development of a disclosure checklist based on the regulators’ codes of corporate governance is a useful addition to the literature.
This paper provides a critical review of the corporate governance quantification process at academic and professional levels to scrutinize the main troubles in the black box of CG assessment models and spot some lights on how to develop a valid Corporate Governance Index (CGI) at the firm and industry levels regarding evenly the entire stakeholders' perceptions. Prior literature has been reviewed and a Corporate Governance index was constructed merging the power of multi-methodologies: Principal Component Analysis (PCA), Delphi Technique and Stability analysis. The findings show that the validity of the results necessitates enforcing End to End processes and taking into account the country's individualization to increase the reliability and comparability of the results. As well, the governance ratings are sensitive to the applied methodology, particularly, a well-known approach in quantifying CG, i.e., dichotomous approach, is underestimated the index findings then it will directly affect all aspects of governance endogeneity with firm’s performance/value. This research has important practical implications for governance guidelines setters, companies, stakeholders and other researchers. For the G setters, it underlines the necessity to make harmonization between industries' regulations and governance code, and revise the priority of the "comply or explain" approach in practice; which could serve as a roadmap for future improvements and researches. For companies, this paper highlights which effective G mechanisms and urges the role of the boardroom in monitoring and explanations for non-compliance. For CGI users, the research highlights that ratings' users should be more precautions and concerned about the base of the assessing models.
The aim of this study is to examine the factors that influence companies to disclose voluntary information in their annual reports of Textile Manufacturing Companies in Bangladesh. The study is used ordinary least squares (OLS) regression model to examine the relationship between dependent variable and independent variables. The factors are proportion of independent non-executive directors (INDs), board size, board audit committee, ownership structure, Profitability and firm size. The extent of voluntary disclosure level is measured by using 68 items of information. Data have been taken from annual reports of 21 listed Textile Manufacturing Companies in DSE of Bangladesh-2010. The result shows a positive association between board size and voluntary disclosure and also total assets with voluntary disclosure. In contrast, the extent of voluntary disclosure is negatively related to the ownership structure.
Purpose
The purpose of this paper is to empirically investigate the impact of board characteristics such as size, independence, busyness and duality on the extent of discretionary disclosures of listed Indian firms.
Design/methodology/approach
A disclosure index with 110 items was constructed to assess the discretionary disclosures in the annual reports of listed firms. The study measured disclosure using 1024 firm-year observations over 8 years from 2009 to 2016. Board characteristics such as size, independence, busyness and duality have been used in the study as indicators of corporate governance.
Findings
The results indicate that while the proportion of independent directors positively impacts the extent of discretionary disclosures, boards with duality and the busyness of the director have a negative impact. The size of the board does not significantly impact the extent of disclosures.
Research limitations/implications
This study examines the discretionary disclosures made only in the annual reports. Future studies could examine information disclosed in other media. Moreover, this study uses an un-weighted self-constructed disclosure index, which is subject to its inherent limitations.
Originality/value
This study has examined the impact of the ‘busyness’ of the director on the extent of disclosures. This variable has not been explored in prior studies. The significance of the variable indicates that the number of directorships held impacts the efficiency with which a director performs his/her role in the board. The study reiterates the need for firms and policymakers to focus on improving board independence and to move away from leadership structures with duality.
The Asian financial crisis in the late 1990s not only highlighted the welfare consequences of transparency in the financial sector but also linked this relatively narrow problem to the broader context of transparency in governance. It has been observed that objections to transparency, often on flimsy pretexts, are common even in industrialized countries. This article argues that transparency is indispensable to the financial sector and describes its desirable characteristics: access, timeliness, relevance, and quality. The authors emphasize the need to weigh the costs and benefits of a more transparent regulatory policy, and they explore the connection between information imperfections, macroeconomic policy, and questions of risk. The article argues for developing institutional infrastructure, standards, and accounting practices that promote transparency, implementing incentives for disclosure and establishing regulations to minimize the perverse incentives generated by safety net arrangements, such as deposit insurance. Because institutional development is gradual, the authors contend that relatively simple regulations, such as limits on credit expansion, may be the most reasonable option for developing countries. They show that transparency has absolute limits because of the lack of adequate enforcement and argue that adequate enforcement may be predicated on broader reforms in the public sector.
What makes organizations so similar? We contend that the engine of rationalization
and bureaucratization has moved from the competitive marketplace to the state and
the professions. Once a set of organizations emerges as a field, a paradox arises:
rational actors make their organizations increasingly similar as they try to
change them. We describe three isomorphic processes--coercive, mimetic, and
normative-leading to this outcome. We then specib hypotheses about the impact of
resource centralization and dependency, goal ambiguity and technical uncertainty,
and professionalization and structuration on isomorphic change. Finally, we suggest
implications for theories of organizations and social change.
We use a sample of large bank holding companies to empirically examine the association between financial performance and organizational structure. We regress firm accounting performance on measures of board independence, CEO pay-performance sensitivity, the product of board independence and CEO pay-performance sensitivity, and other organizational features and control variables. We find that both CEO pay-performance sensitivity and the relative tenure of independent outside directors have a positive effect on accounting performance. Their interactive effect tends to be negative. Thus, the marginal value of each mechanism for accounting performance declines as the use of the other mechanism increases. These results are robust in a simultaneous equations framework that accounts for endogeneity issues. We also find a positive relation between the percentage of independent outside directors and CEO pay-performance sensitivity.
Bushman and Smith (2001, this issue) provide a useful review of research on the role of accounting in management compensation contracts and an appealing future research agenda that builds on recent research using a cross-country approach. This paper rounds out their discussion by highlighting some limitations of their research agenda, providing a critical review of the contributions of accounting scholars to governance research and highlighting research opportunities on the role of financial accounting in governance mechanisms other than managerial incentive contracts.
This article examines the state of normalization of the environmental issue in Swedish organizations. This is investigated through an examination of statements in annual reports and the use of actor-network theory. This article suggests that the environmental issue is becoming normal in organizations by referring to present organizational activities. By coining the idea of linguistic actants, the article highlights the fact that words, expressions, and concepts can be viewed as actors in the greening process. The study illustrates that choosing the right concepts as allies is crucialfor organizations trying to turn the environmental issue into a normal business issue.
This book is an analytical overview of the regulation of shareholder activism in the UK and Germany. At a more general level, the book shows how the comparative legal method can be used in the study of the corporate governance systems of different countries. The book deals with the regulation of the governance of listed companies within a wide framework that recognises the importance of company law, securities markets law, standards and internal rule-making. The author examines the fundamental similarities and differences between the regulation of corporate governance in these two jurisdictions and argues that the nature of German law is often misunderstood in corporate governance scholarship. The book is an essential resource for all those studying comparative corporate governance.
This study investigates firms subject to accounting enforcement actions by the Securities and Exchange Commission for alleged violations of Generally Accepted Accounting Principles. We investigate: (i) the extent to which the alleged earnings manipulations can be explained by extant earnings management hypotheses; (ii) the relation between earnings manipulations and weaknesses in firms' internal governance structures; and (iii) the capital market consequences experienced by firms when the alleged earnings manipulations are made public. We find, that an important motivation for earnings manipulation is the desire to attract external financing at low cost. We show that this motivation remains significant after controlling for contracting motives proposed in the academic literature. We also find that firms manipulating earnings are: (i) more likely to have boards of directors dominated by management; (ii) more likely to have a Chief Executive Officer who simultaneously serves as Chairman of the Board; (iii) more likely to have a Chief Executive Officer who is also the firm's founder; (iv) less likely to have an audit committee; and (v) less likely to have an outside blockholder. Finally, we document that firms manipulating earnings experience significant increases in their costs of capital when the manipulations are made public.
This paper examines the relations between the disclosure practices of firms, the number of analysts following each firm and properties of the analysts' earnings forecasts. Using data from the Report of the Financial Analysts Federation Corporate Information Committee (FAF Report 1985-89), we provide evidence that firms with more informative disclosure policies have a larger analyst following, more accurate analyst earnings forecasts, less dispersion among individual analyst forecasts and less volatility in forecast revisions. The results enhance our understanding of the role of analysts in capital markets. Further, they suggest that potential benefits to disclosure include increased investor following, reduced estimation risk and reduced information asymmetry, each of which have been shown to reduce a firm's cost of capital in theoretical research.
Corporate governance describes an apparent attempt by the corporate sector to put its house in order. Relative to a number of notorious examples of illegal or unethical corporate malpractice, corporate governance is seen as a recent, welcome and well-intentioned concern. However, rather than the universal good which it would appear to be, by reference to the work of Foucault corporate governance is disclosed as partial and interested. Far from being a new response to a contemporary problem, corporate governance is shown to have a long history, both of academic interest and of ineffectuality. Apparent differences in orientation over its history are dissolved and, via the analogy of chiaroscuro, corporate governance is shown to be just another reactive and manipulative defense of capitalism.
This paper examines the inter-dependent role of corporate governance and financial reporting within the institutional context of listed companies in the UK. Four related issues are addressed: the nature of the current problems of corporate governance, the role of financial reporting as a palliative for these problems, the need to regulate financial reporting if it is to fill this role, and the form which such regulation is likely to take. It is concluded that improvements in financial reporting may be a necessary condition for improved corporate governance, but they may not be sufficient. Improvements in financial reporting are likely to be facilitated by some form of regulation, because of the need to devise a standard form which will aid inter-firm comparisons. Self regulation by professional bodies has emerged as the initial method of regulation, but this is unlikely to be a permanent solution. If the professional body has monopoly power, there will be pressure for a wider form of private sector regulation, including other parties (such as users of accounts), in order to prevent abuse of monopoly power in favour of the profession. If it lacks monopoly power, the self-regulation will have inadequate enforcement power, and this will lead to calls for legal backing from the state, which will involve a degree of public regulation.
This study empirically tests the prediction that the inclusion of larger proportions of outside members on the board of directors significantly reduces the likelihood of financial statement fraud. Results from logit regression analysis of 75 fraud and 75 no-fraud firms indicate that no-fraud firms have boards with significantly higher percentages of outside members than fraud firms; however, the presence of an audit committee does not significantly affect the likelihood of financial statement fraud. Additionally, as outside director ownership in the firm and outside director tenure on the board increase, and as the number of outside directorships in other firms held by outside directors decreases, the likelihood of financial statement fraud decreases.
In this exploratory study, a series of interviews with analysts and firm executives, supplemented with an analysis of annual report disclosures, is used to provide insights into the research and development (R & D) disclosure environment within which technology-intensive firms operate. The interviews cover questions of interest to both professional and academic accounting audiences, including the types of R & D information which firms reveal and analysts use, managers' concerns with revealing proprietary or bad news R & D information, the potential benefits from effective R & D disclosure management, and views on deferring vs. expensing development expenditures. The content analysis provides a description of the quantity, subject matter, and location of the R & D disclosures contained in 113 Toronto Stock Exchange-listed firms' annual reports. Finally, the regression analysis explores the association between six disclosure environment factors (R & D expense proportion, accounting policy for development expenditures, [cross-] listing status, industry, capital structure, and firm size) and the amount of R & D disclosure firms provide.
This paper sets out to make some comment on the debate surrounding explanatory theories for the phenomenon of voluntary social disclosure. It notes that two explanations appear from the literature to be most prominent: legitimacy theory and political-economy of accounting explanations, both of which are consistent with a stakeholder understanding of the organization-society relationship. The published annual corporate reports of the British retailer Marks and Spencer Plc are analyzed over the period 1969–1997 inclusive with a view to providing insight into the causes of variability in the volume of social disclosure. The scope of sample selection in previous empirical studies is discussed and commented upon. Methods of data capture used in this empirical analysis are discussed. The paper finds that whilst the expected upward trend in CSR is notable, the more interesting feature in the longitudinal analysis is the variability in disclosure between chairmen’s terms in office. It is argued that marginal variability of disclosure can be explained by the varying perceptions of reality of the successive chairmen. The limitations of existing theories as explicators of the observed phenomenon are briefly discussed.
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This study breaks with the prior literature on intellectual capital disclosure practices in two major ways. First, this study provides a longitudinal examination of intellectual capital disclosure practices in the annual reports of thirty-one FTSE 100 listed companies from 1996 -2000. Second, this study investigates the relationship between intellectual capital performance and the extent of intellectual capital disclosure. Between 1996-2000 the quantity of intellectual capital disclosure increased. Empirical findings did not indicate a systematic relationship between intellectual capital performance and the quantity of disclosure during the survey period. Results, however, suggest if intellectual capital performance is too high the amount of disclosure is reduced. This negative association may support the suggestion firms reduce intellectual capital disclosures when performance reaches a threshold level for fear of competitive advantage being lost. Leverage, industry exposure and listing status was also found to have an influence on the quantity of disclosure.
Concern that earnings management erodes the quality of financial reporting has prompted the Securities and Exchange Commission to question the role of the external auditor. To help address this concern, this study examines the relation between earnings management and auditor litigation. While prior research on the relation between auditor litigation and total accruals has yielded inconclusive results, I find that the risk of auditor litigation is positively associated with a sharper measure of earnings management, abnormal accruals. Using a larger and more recent sample, this study provides evidence that the probability of auditor litigation increases as clients report more positive (income-increasing) abnormal accruals. This result holds in: (1) univariate analyses, (2) logit analyses that also control for auditor size, client importance to the auditor, length of the auditor-client relationship, client industry, client financial condition, client size, and client growth, and in (3) the subsample of lawsuits alleging wrongdoing in the more recent time period (1984 - 1998).
Using data on directors' and officers' insurance policies gathered from a sample of Canadian firms, this article examines the determinants of firms' demand for D&O insurance. Firms with greater litigation risk are more likely to purchase insurance and carry higher limits and deductibles. The data do not support the hypothesis that director cash compensation substitutes for D&O insurance. Consistent with the hypotheses of Mayers and Smith (1982, 1987), firms with greater distress probability and utilities are more likely to purchase insurance and carry higher limits. However, firms with greater inside shareownership are less likely to purchase insurance and carry lower limits. Firms with greater inside voting control are more likely to purchase insurance and carry higher limits.
This study investigates firms subject to accounting enforcement actions by the Securities and Exchange Commission for alleged violations of Generally Accepted Accounting Principles. We investigate: (i) the extent to which the alleged earnings manipulations can be explained by extant earnings management hypotheses; (ii) the relation between earnings manipulations and weaknesses in firms' internal governance structures; and (iii) the capital market consequences experienced by firms when the alleged earnings manipulations are made public. We find that an important motivation for earnings manipulation is the desire to attract external financing at low cost. We show that this motivation remains significant after controlling for contracting motives proposed in the academic literature. We also find that firms manipulating earnings are: (i) more likely to have boards of directors dominated by management; (ii) more likely to have a Chief Executive Officer who simultaneously serves as Chairman of the Board; (iii) more likely to have a Chief Executive Officer who is also the firm's founder, (iv) less likely to have an audit committee; and (v) less likely to have an outside blockholder. Finally, we document that firms manipulating earnings experience significant increases in their costs of capital when the manipulations are made public.
This paper examines the relation between the disclosure practices of firms, the number of analysts following each firm, and properties of the analysts' earnings forecasts. Using data from the Financial Analysts Federation Corporate Information Committee Report (FAF Report), we provide evidence that firms with more informative disclosure policies have a larger analyst following, more accurate analyst earnings forecasts, less dispersion among individual analyst forecasts and less volatility in forecast revisions. The results enhance our understanding of the role of analysts in capital markets. Further, they suggest that potential benefits to disclosure include increased investor following, reduced estimation risk and reduced information asymmetry, each of which have been shown to reduce a firm's cost of capital in theoretical research.
We develop a theoretical framework that explains firms' reactions to new accounting standards, especially, those released by the FASB under its extended adoption policy. Our theory highlights the differences between recognized and disclosed accounting information, and provides a link between firms' adoption strategy and stock price behavior around the adoption announcement. We also consider the relation between delaying information release and renegotiating related contracts. Finally, we analyze the impact of alternative adoption policies allowed by a regulator.We argue that mangers utilize the extended adoption period and strategically choose adoption timing and reporting method to convey to the market their private information about the new standard's financial impact. our model predicts that firm with "favorable" information recognize the impact of the new standard earlier than the mandatory adoption date, firms with "neutral" information disclose the impact in the footnotes to the financial statements, and firms with "unfavorable" information defer reporting until the mandatory adoption date and renegotiate the underlying contract. As a result, a positive market reaction to an early-adoption (recognition) decision is anticipated. In our companion study, Amir and Ziv (1997), obtain results that are consistent with these predictions, using data on SFAS 106 adoption.
Researchers and practitioners have devoted considerable attention to firms'' policies regarding discretionary disclosures. Prior studies argue that firms increase demand for their debt and equity issues and, thus, lower their cost of capital, by providing more informative disclosures. However, empirical research has generally not been able to document significant benefits from increased disclosure.This paper proposes an alternative explanation – firms disclose because it is the socially responsible thing to do. We argue that companies have incentives to engage in stakeholder management by undertaking socially responsible activities and that providing extensive and informative disclosures is one such practice.We examine the relationship between firms'' disclosures and measures of social responsibility. We use ratings provided by the Council on Economic Priorities as proxies for the degree of social responsibility adopted by the sample firms. Disclosure rankings provided by the annual Association for Investment Management and Research Corporate Information Committee Reports (AIMR Reports) are used to measure disclosure level.Our results indicate that there is a positive relationship between disclosure level and corporate social responsibility. That is, firms that engage in socially responsive activities provide more informative and/or extensive disclosures than do companies that are less focused on advancing social goals. In addition, we find that socially responsible firms are more likely to provide this increased disclosure through better investor relations practices. These results support our contention that increased disclosure is a form of socially responsible behavior.
Financial reporting and disclosure are potentially important means for management to communicate firm performance and governance to outside investors. We provide a framework for analyzing managers’ reporting and disclosure decisions in a capital markets setting, and identify key research questions. We then review current empirical research on disclosure regulation, information intermediaries, and the determinants and economic consequences of corporate disclosure. Our survey concludes that current research has generated a number of useful insights. We identify many fundamental questions that remain unanswered, and changes in the economic environment that raise new questions for research.
My paper presents a model to detect earnings management among firms experiencing extreme financial performance, and compares the model's performance to that of discretionary accrual models. I found that the model provides timely assessments of the likelihood of manipulation, and that model-based trading strategies earn significant abnormal returns. I also present evidence suggesting that the specification of discretionary accrual models could be enhanced by adding lagged total accruals and a measure of past price performance as explanators. The evidence arises from studying actual instances of earnings management. Its implications are in line with the Guay et al. (1996, p. 104) conjecture that accrual models which take into account managers' incentives, and recognize that discretionary accruals reverse, have a better chance of identifying discretionary accruals. The results have implications for researchers investigating managers' accrual decisions in contexts such as security offerings and financial distress, where extreme performance limits the usefulness of accrual models.
We examine investor communication issues using the experience of CUC International. CUC had difficulty convincing investors that its marketing outlays were profitable investments, leading to stock misvaluation over an extended period. To resolve this problem, CUC adopted an accounting change and then underwent a leveraged recapitalization. Subsequently, it accelerated recap debt repayments and initiated a stock repurchase. CUC's experience suggests that accounting reports are not always effective in investor communication. While financial signals are more effective, their impact is not as immediate as predicted by prior research. The CUC case suggests that investor communications is a rich area for future research.
This study empirically tests the prediction that the inclusion of larger proportions of outside members on the board of directors significantly reduces the likelihood of financial statement fraud. Results from logit regression analysis of 75 fraud and 75 no-fraud firms indicate that no-fraud firms have boards with significantly higher percentages of outside members than fraud firms; however, the presence of an audit committee does not significantly affect the likelihood of financial statement fraud. Additionally, as outside director ownership in the firm and outside director tenure on the board increase, and as the number of outside directorships in other firms held by outside directors decreases, the likelihood of financial statement fraud decreases.
Contenido: Introducción al modelo de regresión; Estadística elemental: a revisión; El modelo de regresión de dos variables; El modelo de regresión múltiple; Usando el modelo de regresión múltiple; Correlación serial y heterocedasticidad; Variable instrumentales y especificación del modelo; Pronóstico con un modelo de regresión de una sola ecuación; Estimación de una sola ecuación: temas avanzados; Estimación no lineal y de máxima verosimilitud; Modelos de elección cualitativa; Estimación de ecuaciones simultáneas; Introducción a los modelos de simulación; Comportamiento dinámico de los modelos de simulación; Suavizamiento y extrapolación de series de tiempo; Propiedades de las series de tiempo estocásticas; Modelos lineales de series de tiempo; Estimación y pronóstico con modelos de series de tiempo; Aplicaciones de los modelos de series de tiempo.
http://deepblue.lib.umich.edu/bitstream/2027.42/36117/2/b1665777.0001.001.pdf http://deepblue.lib.umich.edu/bitstream/2027.42/36117/1/b1665777.0001.001.txt
This article proposes a theory of corporate transparency and its determinants. We show that under imperfect product market competition, the corporate transparency decision affects the value of equity and debt claims differently. We then embed this insight in a model of endogenous investor influence in which banks may emerge as dominant investors. In line with evidence from continental Europe and Japan, we find that dominant creditors seek to decrease transparency below the level preferred by equity holders. The theory predicts a clustering of firm characteristics that emerge when capital markets are not sufficiently investor friendly to allow arm's-length monitoring: bank dominance, opaqueness, uncertainty about assets in place, low variability of profits, and reduced average profits.
We examine the effect of managerial ownership on the demand for accounting conservatism as measured by the asymmetric timeliness of earnings (Basu, 1997). The separation of ownership and control as reflected by the levels of managerial ownership induce two agency problems between managers and shareholders: the incentive alignment effect and the management entrenchment effect. Since accounting conservatism is expected to mitigate agency problems between managers and shareholders, we predict that these agency problems increase the demand for accounting conservatism. We empirically test the relationship between managerial ownership and the asymmetric timeliness of earnings using a cubic form model for Japanese firms. We find that within the low and high levels of managerial ownership, managerial ownership is significantly negatively related to the asymmetric timeliness of earnings, which is consistent with the implication of the incentive alignment effect. We also find a significant positive relationship between managerial ownership and the asymmetric timeliness of earnings for the intermediate levels of managerial ownership, as suggested by the management entrenchment effect. Our results hold after controlling the market-to-book ratio, leverage, firm size, and year. These evidences support our prediction and suggest the possibility that accounting conservatism contributes to addressing the agency problem between managers and shareholders.
This article proposes a theory of corporate transparency and its determinants. We show that under imperfect product market competition, the corporate transparency decision affects the value of equity and debt claims differently. We then embed this insight in a model of endogenous investor influence in which banks may emerge as dominant investors. In line with evidence from continental Europe and Japan, we find that dominant creditors seek to decrease transparency below the level preferred by equity holders. The theory predicts a clustering of firm characteristics that emerge when capital markets are not sufficiently investor friendly to allow arm's-length monitoring: bank dominance, opaqueness, uncertainty about assets in place, low variability of profits, and reduced average profits.
This paper investigates the impact of international migration on technical efficiency, resource allocation and income from agricultural production of family farming in Albania. The results suggest that migration is used by rural households as a pathway out of agriculture: migration is negatively associated with both labour and non-labour input allocation in agriculture, while no significant differences can be detected in terms of farm technical efficiency or agricultural income. Whether the rapid demographic changes in rural areas triggered by massive migration, possibly combined with propitious land and rural development policies, will ultimately produce the conditions for a more viable, high-return agriculture attracting larger investments remains to be seen.
Using the result that under the null hypothesis of no misspecification an asymptotically efficient estimator must have zero asymptotic covariance with its difference from a consistent but asymptotically inefficient estimator, specification tests are devised for a number of model specifications in econometrics. Local power is calculated for small departures from the null hypothesis. An instrumental variable test as well as tests for a time series cross section model and the simultaneous equation model are presented. An empirical model provides evidence that unobserved individual factors are present which are not orthogonal to the included right-hand-side variable in a common econometric specification of an individual wage equation.
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