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Article
Publication date: 22 October 2021

Haitham Nobanee and Nejla Ould Daoud Ellili

This study aims to explore the extent of voluntary corporate governance disclosure in the annual reports of banks in the UAE, operating in an emerging economy in the Gulf…

Abstract

Purpose

This study aims to explore the extent of voluntary corporate governance disclosure in the annual reports of banks in the UAE, operating in an emerging economy in the Gulf Cooperation Council region. It also examines the effect of this non-financial disclosure on bank performance by differentiating conventional and Islamic banks.

Design/methodology/approach

This study applies content analysis to explore the extent of voluntary corporate governance disclosure using data collected from the annual reports of all the banks traded on the UAE financial markets from 2003 through 2020. It further examines the potential effect of voluntary disclosure on bank performance using dynamic panel data regressions.

Findings

The results indicate a low level of voluntary corporate governance disclosure in the annual reports for most disclosure indices. However, conventional and Islamic banks do not differ significantly. Additionally, the results of the robust dynamic panel data from the two-step generalized method of moments system estimation confirm that voluntary corporate governance disclosure does not affect bank performance significantly.

Practical implications

The findings of this study would benefit the central bank and lawmakers in the UAE in developing a framework for appropriate voluntary disclosure and enhancing the corporate governance framework to improve the quality of annual reports.

Originality/value

This study contributes to the literature on the extent of corporate governance disclosure, as well as its association with bank performance in an emerging economy by differentiating between conventional and Islamic banks.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 15 July 2021

Giuseppe Nicolò, Giovanni Zampone, Giuseppe Sannino and Serena De Iorio

Recent regulatory changes in Europe have promoted non-financial reporting practices (e.g., Directive, 2014/95/EU) and gender diversity in decision-making positions…

Abstract

Purpose

Recent regulatory changes in Europe have promoted non-financial reporting practices (e.g., Directive, 2014/95/EU) and gender diversity in decision-making positions. Special attention is devoted to promoting the gender balance on corporate boards as a key mechanism to enhance corporate governance effectiveness and better address multiple stakeholders' needs. With this in mind, this study intends to examine the impact of boardroom gender diversity on Environmental Social Governance (ESG) disclosure practices in the European listed firms' context.

Design/methodology/approach

The study applies different panel data models on an extended sample of 1,392 firms from 21 European Union (EU) countries for six years (2014–2019).

Findings

Findings allow to spotlight the positive role exerted by the presence of women directors on the boards in enhancing ESG disclosure, both at the overall and specific (individual ESG scores) level.

Research limitations/implications

Policymakers and regulators might consider the study's evidence as a stimulus to continue in promoting strategic actions and reforms that foster gender equality and balance in corporate decision-making positions.

Practical implications

Creating a heterogeneous and diversified board of directors may support implementing a “sustainable corporate governance” recently claimed by the EC.

Originality/value

The study contributes to the literature by disentangling the links between gender diversity and ESG disclosure over a period that covers a long season of European regulations and measures that affected both non-financial reporting practices and the board of directors' composition. Accordingly, it can contribute to enhancing the practical and theoretical understanding of the pivotal role that gender diversity may exert in strengthening corporate governance and, in turn, corporate transparency and accountability behaviours about non-financial issues.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

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Book part
Publication date: 23 June 2005

Duncan Green and Cameron Graham

In Canada, companies are focusing on corporate governance as an ethical response to accounting scandals and the resulting crisis of confidence. Although, many aspects of…

Abstract

In Canada, companies are focusing on corporate governance as an ethical response to accounting scandals and the resulting crisis of confidence. Although, many aspects of corporate governance remain free from strict regulation, we examine the voluntary changes in the disclosures of the largest Canadian companies. We attempt to understand, through disclosure theory, discourse analysis, and structuration theory, the quality of these corporate governance disclosures. We recognize that much of the disclosure is opportunistic as companies state that they have not only complied with the non-compulsory Canadian guidelines, but have also met and exceeded the requirements of U.S. regulators. This is an important finding that supports the notion that Canadian companies do not need rules and regulations. Instead, a culture of governance is developing at the boards of large companies that encourages voluntary change. Whether this is enough to prevent future accounting scandals is a question for future research.

Details

Corporate Governance: Does Any Size Fit?
Type: Book
ISBN: 978-1-84950-342-6

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Book part
Publication date: 22 August 2017

Roshima Said, Corina Joseph and Noor Zahirah Mohd Sidek

The principles of sustainable development argue that organizations should make decisions not only based on economic or financial factors but also based on the long-term…

Abstract

The principles of sustainable development argue that organizations should make decisions not only based on economic or financial factors but also based on the long-term social and environmental consequences. The Code on Corporate Governance is one of the drivers for corporate social responsibility (CSR) reporting in Malaysia. Additionally, the way managers execute their responsibilities may be affected by their own tradition, beliefs, values, and culture. Thus, this chapter aims to examine the relationship between corporate governance characteristics and CSR disclosure and to investigate the influence of cultural values (Board’s Culture Domination) on the relationship between corporate governance and corporate social responsibility. A sample of 150 companies from the main board of Bursa Malaysia for year ended 2006 are chosen for the purpose of this study due to the year of the introduction of Bursa Malaysia CSR Framework. Based on available data, a CSR index is constructed. Hierarchical regression analysis is used to examine the relationship between the CSR disclosure index and the independent variables and also the moderating effect of Board’s Culture Domination. Results show that government ownership and audit committees have a positive and significant influence on CSR disclosure. Furthermore, the findings show that the Board’s Culture Domination moderate the relationship between audit committee, number of shareholders, foreign ownership, and CSR disclosure.

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Book part
Publication date: 23 August 2021

Mohammad Nurunnabi

The study aims at reviewing a synthesis of disclosure, transparency, and International Financial Reporting Standards (IFRS) implementation in an attempt to provide…

Abstract

The study aims at reviewing a synthesis of disclosure, transparency, and International Financial Reporting Standards (IFRS) implementation in an attempt to provide directions for future research. Prior research overwhelmingly supports that the IFRS adoption or effective implementation of IFRS will enhance high-quality financial reporting, transparency, enhance the country’s investment environment, and foreign direct investment (FDI) (Dayanandan, Donker, Ivanof, & Karahan, 2016; Gláserová, 2013; Muniandy & Ali, 2012). However, some researchers provide conflicting evidence that developing countries implementing IFRS are probably not going to encounter higher FDI inflows (Gheorghe, 2009; Lasmin, 2012). It has also been argued that the IFRS adoption decreases the management earnings in countries with high levels of financial disclosure. In general, the study indicates that the adoption of IFRS has improved the financial reporting quality. The common law countries have strong rules to protect investors, strict legal enforcement, and high levels of transparency of financial information. From the extensive structured review of literature using the Scopus database tool, the study reviewed 105 articles, and in particular, the topic-related 94 articles were analysed. All 94 articles were retrieved from a range of 59 journals. Most of the articles (77 of 94) were published 2010–2018. The top five journals based on the citations are Journal of Accounting Research (187 citations), Abacus (125 citations), European Accounting Review (107 citations), Journal of Accounting and Economics (78 citations), and Accounting and Business Research (66 citations). The most-cited authors are Daske, Hail, Leuz, and Verdi (2013); Daske and Gebhardt (2006); and Brüggemann, Hitz, and Sellhorn (2013). Surprisingly, 65 of 94 articles did not utilise the theory. In particular, four theories have been used frequently: agency theory (15), economic theory (5), signalling theory (2), and accounting theory (2). The study calls for future research on the theoretical implications and policy-related research on disclosure and transparency which may inform the local and international standard setters.

Details

International Financial Reporting Standards Implementation: A Global Experience
Type: Book
ISBN: 978-1-80117-440-4

Keywords

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Book part
Publication date: 20 May 2019

Rihab Grassa, Sherif El-Halaby and Khaled Hussainey

This chapter assesses the effects of corporate governance (CG) variables on the level of Corporate Social Responsibility Disclosure (CSRD), Shari'ah Supervisory Board…

Abstract

This chapter assesses the effects of corporate governance (CG) variables on the level of Corporate Social Responsibility Disclosure (CSRD), Shari'ah Supervisory Board Disclosure (SSBD), and Financial Disclosure (FD) for Islamic banks. This study, based on a sample of 95 Islamic banks, assessed this in 2013. The findings suggest that CG mechanisms, firm's age, auditor and shari'ah auditing department are effective in influencing SSBD, CSRD, and FD practices in Islamic banks. This chapter encourages regulators to improve CG mechanisms in their Islamic banking systems through the optimization of ownership structure (dispersed ownership) and the board's characteristics in order to promote transparency and disclosure. Moreover, the findings support theoretical arguments that firms disclose CG information in order to mitigate information asymmetry and agency costs and to improve investor confidence in the reported financial statements. The empirical evidence of this study enhances the understanding of the CG disclosure environment in Islamic banks as a promoting new financial system.

Details

Research in Corporate and Shari’ah Governance in the Muslim World: Theory and Practice
Type: Book
ISBN: 978-1-78973-007-4

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Article
Publication date: 20 January 2021

Nischay Arora, Ridhima Saggar and Balwinder Singh

The study aims to explore the unexplored domain by examining the impact of risk disclosure on corporate reputation in an emerging economy, like India, characterized by…

Abstract

Purpose

The study aims to explore the unexplored domain by examining the impact of risk disclosure on corporate reputation in an emerging economy, like India, characterized by huge information asymmetry and uncertainty.

Design/methodology/approach

In total two measures of corporate reputation, i.e. market capitalization and excess of market value over book value have been deployed to measure reputation. Automated content analysis has been executed to measure the extent of total risk disclosure. The empirical analysis is premised on a sample of S&P BSE-100 index spanning over the period of ten years from 2009–2010 to 2018–2019; which eventually gets reduced to 58 nonfinancial firms. In order to unearth the risk–reputation relationship, a panel regression technique has been employed.

Findings

The main findings unmask that corporate risk disclosure has a positive bearing on corporate reputation. Substantiating legitimacy theory, its alternative measures like market capitalization and excess of market value over book value divulged to positively influence corporate reputation.

Research limitations/implications

The study has certain limitations: since there is no standard method of measuring reputation, the results may vary subject to the changes in proxies of corporate reputation. The study also analyzed S&P BSE 100 index in India, and future research needs to approach a larger sample and in other emerging economies to fill up enough empirical evidence in this domain.

Practical implications

The findings provide insight into the managers on making higher divulgence of material risk information for augmenting corporate reputation. In other words, it indirectly propels the firm to exhibit higher risk information for building reputational capital. From the investor's standpoint, they should admire such firms which dispel more risk information and should have positive outlook toward them, which in turn prompts them to disclose more risks.

Originality/value

This study is unique as it is the first longitudinal study examining the impact of risk disclosure on corporate reputation in Indian settings. It, thus, assists in furthering the risk disclosure literature where there is hardly any study that comprehensively looks into risk–reputation liaison among Indian nonfinancial companies.

Details

Journal of Strategy and Management, vol. 14 no. 4
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 13 October 2020

Bijitaswa Chakraborty and Titas Bhattacharjee

The purpose of this paper is to give a comprehensive review and synthesis of automated textual analysis of corporate disclosure to show how the accuracy of disclosure tone…

Abstract

Purpose

The purpose of this paper is to give a comprehensive review and synthesis of automated textual analysis of corporate disclosure to show how the accuracy of disclosure tone has been incremented with the evolution of developed automated methods that have been used to calculate tone in prior studies.

Design/methodology/approach

This study have conducted the survey on “automated textual analysis of corporate disclosure and its impact” by searching at Google Scholar and Scopus research database after the year 2000 to prepare the list of papers. After classifying the prior literature into a dictionary-based and machine learning-based approach, this study have again sub-classified those papers according to two other dimensions, namely, information sources of disclosure and the impact of tone on the market.

Findings

This study found literature on how value relevance of tone is varied with the use of different automated methods and using different information sources. This study also found literature on the impact of such tone on market. These are contributing to help investor’s decision-making and earnings and returns prediction by researchers. The literature survey shows that the research gap lies in the development of methodologies toward the calculation of tone more accurately. This study also mention how different information sources and methodologies can influence the change in disclosure tone for the same firm, which, in turn, may change market performance. The research gap also lies in finding the determinants of disclosure tone with large scale data.

Originality/value

After reviewing some papers based on automated textual analysis of corporate disclosure, this study shows how the accuracy of the result is incrementing according to the evolution of automated methodology. Apart from the methodological research gaps, this study also identify some other research gaps related to determinants (corporate governance, firm-level, macroeconomic factors, etc.) and transparency or credibility of disclosure which could stimulate new research agendas in the areas of automated textual analysis of corporate disclosure.

Details

Journal of Financial Reporting and Accounting, vol. 18 no. 4
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 28 May 2020

Mohd Shukor Harun, Khaled Hussainey, Khairul Ayuni Mohd Kharuddin and Omar Al Farooque

This study aims to explore the corporate social responsibility disclosure (CSRD) practices of the Islamic banks in the Gulf Cooperation Council (GCC) countries during the…

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Abstract

Purpose

This study aims to explore the corporate social responsibility disclosure (CSRD) practices of the Islamic banks in the Gulf Cooperation Council (GCC) countries during the period 2010-2014 and examines the determinants of CSRD and its effects on firm value.

Design/methodology/approach

Based on the Accounting and Auditing Organization for Islamic Financial Institutions Governance Standard No. 7 guidelines and using content analysis, the paper develops a comprehensive CSRD index for GCC Islamic banks. The study applies ordinary least squares regression analysis for hypothesis testing and for finding determinants of respective dependent variables.

Findings

The results show a very low level of CSRD among the sample Islamic banks in GCC countries. When using corporate governance characteristics to examine the determinants of CSRD, this study provides evidence of a significant positive association between board size and CSRD practice in Islamic banks and a significant negative relationship of chief executive officer (CEO) duality with CSRD, as per expectation. For the economic consequences of CSRD, the study documents an inverse performance effect of CSRD while board size, board composition and CEO duality indicate significant positive effects on firm value.

Research limitations/implications

The relatively small sample size of GCC Islamic banks may limit the application of the findings to other Islamic financial institutions such as Takaful and the Islamic unit trust company.

Practical implications

The findings of this study initiate the global debate on the need for corporate governance reform in Islamic banks by providing insights on the role played by corporate governance mechanisms in encouraging and enhancing CSRD practices among Islamic banks. The findings also have important implications for investors, managers, regulatory bodies, policymakers and Islamic banks in the GCC countries.

Social implications

The results of the study do not support the idea that Islamic banks operating on Islamic principles can meet their social responsibilities through promoting corporate social responsibility (CSR) activities and by differentiating themselves from non-Islamic banks.

Originality/value

This is the first study to examine the determinants of CSRD in GCC Islamic banks using comprehensive CSRD and corporate governance variables and, therefore, adds value to the existing CSR literature in banking.

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Article
Publication date: 21 April 2020

Noha Elberry and Khaled Hussainey

The authors examine the impact of corporate investment efficiency on corporate voluntary disclosure for a sample of UK non-financial companies.

Abstract

Purpose

The authors examine the impact of corporate investment efficiency on corporate voluntary disclosure for a sample of UK non-financial companies.

Design/methodology/approach

The authors use a sample of FTSE All-Share firms for the period of 2007–2014. Disclosure scores are collected from Corporate Financial Information Environment (CFIE). They follow Biddle et al. (2009) and Chen et al. (2011) in measuring corporate investment efficiency.

Findings

The authors find that high level of performance-related disclosure is associated with high level of corporate investment efficiency, while high level of good news information is associated with low level of corporate investment efficiency. They also find evidence on a bidirectional relation between disclosure and corporate investment efficiency.

Research limitations/implications

The authors’ findings would be of importance to stakeholders and corporations. Stakeholders' investment decisions could be facilitated by understanding the disclosures provided by their firms and how these firms' performance is presented. Corporations become aware of the language which must be used to signal their performance.

Practical implications

Corporations become aware of the language which must be used in their disclosures. As firms may reflect their efficient investments but not in the form of good news in order to avoid revealing their competitive advantage to competitors.

Originality/value

This paper adds to disclosure studies by introducing a new variable, corporate investment efficiency, as a determinant of corporate disclosure practice.

Details

Journal of Applied Accounting Research, vol. 21 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

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