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Covid-19 and performance disclosure: does governance matter?

Mahmoud Elmarzouky (Kingston Business School, Kingston University, London, UK)
Khaldoon Albitar (Portsmouth Business School, University of Portsmouth, Portsmouth, UK)
Khaled Hussainey (Portsmouth Business School, University of Portsmouth, Portsmouth, UK)

International Journal of Accounting & Information Management

ISSN: 1834-7649

Article publication date: 11 October 2021

Issue publication date: 22 November 2021

2018

Abstract

Purpose

This paper aims to investigate whether Covid-19 related information is associated with a higher level of performance disclosure in the annual reports. Furthermore, it examines the moderating effect of corporate governance on the relationship between Covid-19 and the performance disclosure by using three governance mechanisms: board size, board independence and gender diversity.

Design/methodology/approach

The authors use quantitative content analysis. The authors applied an automated textual analysis technique to measure the level of Covid-19 information and performance disclosure for the UK Financial Times Stock Exchange all-share non-financial firms.

Findings

The authors found a significant positive relationship between the Covid-19 disclosure and the firm performance disclosure in the annual reports. The authors also find that both board independence and gender diversity moderate the relationship between the Covid-19 related information and the level of performance disclosure in the annual reports. The authors further run a robustness analysis, which confirms the main results.

Practical implications

The finding is beneficial for the regulatory setters to better understand whether firms provide generic or meaningful Covid-19 information linked to the firm’s performance. The unique findings of this paper are relevant to regulators, governments, management, shareholders and academics.

Originality/value

The authors contribute to the literature in a unique and core research area not researched previously. The paper links the Covid-19 disclosure with the firm performance from the corporate narrative perspective. The paper underlines governance factors as a moderating role in this relationship by considering three main mechanisms: board size, board independence and gender diversity.

Keywords

Citation

Elmarzouky, M., Albitar, K. and Hussainey, K. (2021), "Covid-19 and performance disclosure: does governance matter?", International Journal of Accounting & Information Management, Vol. 29 No. 5, pp. 776-792. https://doi.org/10.1108/IJAIM-04-2021-0086

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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