Readability of sustainability reports: evidence from Indonesia

2020 ◽  
Vol 10 (4) ◽  
pp. 621-636
Author(s):  
Desi Adhariani ◽  
Elda du Toit
Keyword(s):  
Financial Services ◽  
English Language ◽  
Emerging Market ◽  
Annual Reports ◽  
Public Companies ◽  
Content Type ◽  
Software Application ◽  
Flesch Reading Ease ◽  
Sustainability Reports ◽  
Market Capitalisation

PurposeThis study aimed at investigating the readability of sustainability reports in Indonesia. The Indonesian government, through the Financial Services Authority of Indonesia (Otoritas Jasa Keuangan [OJK]), has issued regulation POJK 51/2017 concerning the implementation of sustainable finance, which requires public companies to prepare sustainability reports—either stand-alone reports or parts of annual reports. Until 2017, only 30% of the top public companies in terms of market capitalisation issued the required report. Companies' decisions to provide the report stem from the greater visibility and access to resources that flow from additional narratives. However, the usefulness of such a report can be questioned.Design/methodology/approachWe used several linguistic techniques (Flesch Reading Ease [FRE], Flesch–Kincaid, and Gunning Fog measures) to evaluate the readability of sustainability reports. The analysis was performed using a software application called “Readability Studio 2015.”FindingsWe found the reports to have a low level of readability. This means that the information provided in the disclosures are very difficult to decipher and understand by the targeted users. Considering the similar levels of report readability in companies across industries, we observe a pattern of isomorphism in the way companies have implemented the same format and language construct in disclosing their sustainability information. They might apply the myth that complex language attracts investors or impresses others.Research limitations/implicationsThe techniques to measure readability that we use might not capture the whole dimensions of readability and understandability, especially in the non-English language.Practical implicationsThe results from this study can be used as evaluation tools for companies and regulators in preparing more intelligible and readable sustainability reports, as mandated by POJK 51/2017.Social implicationsSustainability reports act as a medium of accountability for a company's sustainable production and operations. Their usefulness for investors and other users often depends on the readability of the information.Originality/valueThe readability of sustainability reports in the context of Indonesia as an emerging market has not been comprehensively investigated in previous research. This study is among the first of its kind to support the quality enhancement of the reports.

The complementarity between corporate social responsibility disclosure and institutional investor in Jordan

2019 ◽  
Vol 12 (2) ◽  
pp. 191-215 ◽  
Author(s):  
Abdullah Daas ◽  
Reem Alaraj
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Community Involvement ◽  
Emerging Market ◽  
Institutional Investor ◽  
Annual Reports ◽  
Content Type ◽  
Csr Disclosure ◽  
Market Capitalisation ◽  
Corporate Social

PurposeThe purpose of this paper is to explore corporate social responsibility (CSR) disclosure and its relation to institutional investor (INSV) of Jordanian private listed companies (PLCs).Design/methodology/approachA unique sample of 159 largest companies over “a period of 8-years” listed on the ASE in terms of market capitalisation during the 2005-2012 period. Testing of hypotheses has been conducted by applying multivariate regression techniques using longitudinal data analysis of companies’ annual reports.FindingsResults which confirmed earlier estimations indicated that there are positive and significant relationships between CSR disclosure (CSRD) and INSV. This result indicates that among the CSRD dimensions, INSVs are less concerned with companies engaging in community contribution practices and those related to the community involvement and product dimension in which the company operates.Practical implicationsJordanian PLCs should be encouraged to be involved in CSR activities as one of their program strategies in attracting investment, as well as to improve their reputation and image in their social activities.Originality/valueThis paper conducts a comprehensive empirical evidence on the development of the relationship between the CSRD dimensions and INSV in Jordanian PLCs as an emerging market, where much existing evidence exists on this issue that may help in explaining difference in prior work.

Board structure, board committees and corporate performance in Russia

2017 ◽  
Vol 43 (10) ◽  
pp. 1073-1092 ◽  
Author(s):  
Irina Berezinets ◽  
Yulia Ilina ◽  
Anna Cherkasskaya
Keyword(s):  
Corporate Performance ◽  
Emerging Market ◽  
Panel Data Analysis ◽  
Gender Diversity ◽  
Board Independence ◽  
Board Structure ◽  
Company Performance ◽  
Public Companies ◽  
Content Type ◽  
Board Committees

Purpose The purpose of this paper is to investigate the link between board structure and performance of public companies in Russia – an emerging market with unique institutional background and a variability of corporate governance (CG) practices across its companies. Design/methodology/approach Panel data analysis was applied on a sample of 207 Russian companies that frequently traded in the Russian Trading System during the period 2007-2011, in order to test hypotheses on the relationships between board size, board independence, gender diversity, presence of board committees and financial performance, as measured by Tobin’s Q. Findings The results show a positive relationship between Tobin’s Q and the board’s gender diversity. The analysis demonstrates that smaller and bigger boards are associated with a greater Tobin’s Q value. Originality/value The findings provide additional evidence of how board structure is related to its effectiveness and corporate performance in countries with concentrated ownership, highly variable CG practices and a lack of proper implementation of corporate law and governance codes. The paper contributes to the existing empirical evidence on the advantages of small and large-sized boards and on gender diversity, and is the first investigating the relationship between Russian companies’ board committees and market-based performance. The results regarding board independence and committees suggest that these mechanisms are still not widely recognized for their role in CG and company performance in Russia.

Audit firms and industry specialization in an emerging economy

2018 ◽  
Vol 14 (3) ◽  
pp. 338-362
Author(s):  
Karim Hegazy ◽  
Mohamed Hegazy
Keyword(s):  
Financial Services ◽  
Capital Investment ◽  
Emerging Economy ◽  
Annual Reports ◽  
Brand Name ◽  
Industry Specialization ◽  
Content Type ◽  
Audit Firm ◽  
Big 4 ◽  
Audit Firms

PurposeThis study aims to investigate the implications of audit industry specialization on auditor’s retention and growth within an emerging economy. Factors such as whether the firm is a Big 4, a firm with international affiliation, a local firm and the type of industry were studied to analyse the reasons behind audit firm retention and growth.Design/methodology/approachThis research is based on a field study related to audit firms providing services to listed companies in an emerging economy. The sample includes the top 100 publicly held companies’ in the Egyptian stock market during 2006-2011 for which their annual reports are analysed to determine the audit firms’ retention and growth. An assessment of the continuity of the auditors and the increase in the number of audit clients were also measured.FindingsThe results confirm that industry specialization has an important effect on the auditor’s retention, especially for industries where capital investment is significant such as buildings, construction, financial services, housing and real estate. Big 4 audit firms retained their clients because of their industry specialization and brand name. Evidence was found that good knowledge of accounting and auditing standards resulted in audit firms with international affiliation competing with the Big 4 for clients’ retention and growth.Originality/valueThis study contributes to the existing literature, as it is among the first to provide empirical evidence on auditor retention, growth and auditor’s dominance in an emerging economy such as Egypt.

Cultural and organizational integration in cross-border M&A deals

2017 ◽  
Vol 30 (7) ◽  
pp. 1109-1135 ◽  
Author(s):  
Andrei Panibratov
Keyword(s):  
Case Studies ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Strong Support ◽  
Annual Reports ◽  
Integration Process ◽  
Key Factors ◽  
Content Type ◽  
Cross Border ◽  
Organizational Integration

Purpose The purpose of this paper is to identify key factors that influence the integration process in cross-border mergers and acquisitions (M&A) deals of emerging multinational enterprises (EMNEs). The research questions are: how national and organizational culture coupled with other organizational characteristics influence M&A deals of EMNEs? Which factors influence the process of cultural and organizational integration in cross-border M&A deals, initiated by EMNEs? What is the effect and consequences that different integration factors have on cross-border M&A deals by EMNEs? Design/methodology/approach The paper is based on a multiple case study research, considering cross-border deals of Chinese and Russian firms separately. Each block consists of two cases, describing M&A integration of companies operating in two sectors: high technology and finance. The authors obtained the data for case studies from companies’ official websites, annual reports, press releases, other official documents where companies were mentioned, business-media sources (newspapers and magazines), published interviews, documented speeches, letters, laws, as well as through blogs and social networks. The authors have also used the published information from articles, books, databases, and previously conducted case studies. Findings The authors have identified the factors influencing deals’ results of Chinese and Russian MNEs, with explanation based on case studies’ analysis. The full list of factors is presented in Table IV in the manuscript. The authors have also identified the set of elements that were derived from the case studies’ analysis only, without having any strong support in the literature, such as changes at a senior management level, educational and business exchanges, CSR policy, and the government involvement. Originality/value The authors have identified the key factors that influence integration of emerging market firms in cross-border M&A deal. The list of factors was adjusted and actualized in accordance with the results of four cases of cross-border M&A deals of Chinese or Russian companies. As a result, the authors founded the combination of characteristics of cultural and organizational integration process of firms from China and Russia.

Female directors and CSR disclosure in Bangladesh: the role of family affiliation

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pallab Kumar Biswas ◽  
Helen Roberts ◽  
Rosalind Heather Whiting
Keyword(s):  
Family Firms ◽  
Emerging Market ◽  
Annual Reports ◽  
Content Type ◽  
Female Directors ◽  
Csr Disclosure ◽  
Female Director ◽  
Corporate Social ◽  
The Impact

Purpose This paper aims to investigate the impact of female director affiliations to governing families on corporate social responsibility (CSR) disclosures in the context of Bangladeshi firms. Design/methodology/approach This study uses a quantitative empirical research method grounded in Socioemotional Wealth (SEW) theory. Data was sourced from Bangladeshi publicly listed non-financial sector companies’ annual reports and stock exchange trading and publication reports and consists of 2,637 firm-year observations from 1996 to 2011. Pooled multivariate regression models are used to test the association between corporate social and environmental disclosure and female directors, and the family affiliation (or not) of those directors. Findings The findings provide strong evidence that female directors who are affiliated to the governing family, founders and other board members reduce CSR disclosure in family firms; unaffiliated female board directors enhance CSR disclosure, and this effect is significant in both family and non-family firms. Research limitations/implications Definitions of family firms and affiliated directors may lead to over-generalization in the results. Originality/value The study highlights variation in the nature of female board appointments in emerging market family-controlled firms. The findings bring attention to the role of affiliated female director appointments in family ownership structures and speak directly to family business owners, advisors and policy makers about the importance of unaffiliated female directors as catalysts of improved CSR disclosure in family and non-family firms.

scholarly journals The internationalization of African fintech firms: marketing strategies for successful intra-Africa expansion

2020 ◽  
Vol 37 (2) ◽  
pp. 299-317 ◽  
Author(s):  
Zara Hammerschlag ◽  
Geoff Bick ◽  
John Manuel Luiz
Keyword(s):  
Financial Services ◽  
Capital Investment ◽  
Emerging Market ◽  
Marketing Strategies ◽  
Structured Interviews ◽  
African Countries ◽  
Content Type ◽  
Venture Capital Investment ◽  
Market Expansion ◽  
Strategy Adaptation

PurposeThe purpose of this study is to explore how African fintech firms adapt their marketing strategies for successful market expansion into new African countries.Design/methodology/approachThis exploratory study is qualitative in nature and utilizes semi-structured interviews at 14 African fintech firms.FindingsThe study reveals that, during intra-Africa expansion, firms adapt their marketing strategies by working with local people, prioritizing customer education, creating personal relationships with customers, adapting their communication strategies and pricing strategies and using social media. The strategies that have been most effective involve including the community in the marketing process, prioritizing relationships, segmenting customers geographically, educating customers about products, using local distribution partners and having a flexible approach to strategy adaptation.Practical implicationsIt has been argued that technological innovation in Africa in areas such as financial services is a critical driver of its future development, because of the opportunity it presents to promote financial inclusion. Through an increase in venture capital investment on the continent, technological innovations in financial services have grown exponentially, and this study contributes to the understanding of the marketing strategies employed to gain market traction.Originality/valueThis study proposes that African fintech firms adopt a bottom-up, value proposition-driven marketing strategy to successfully navigate the environment. The proposed framework provides a lens through which to understand the components of successful strategy adaptation in Africa, against the backdrop of the unique market challenges inherent in this emerging market continent.

Board gender diversity, corporate governance, and earnings management

2019 ◽  
Vol 35 (1) ◽  
pp. 37-60 ◽  
Author(s):  
Nurlan Orazalin
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Management Practices ◽  
Gender Diversity ◽  
Policy Implications ◽  
Annual Reports ◽  
Public Companies ◽  
Content Type ◽  
Weak Evidence ◽  
Board Gender Diversity

Purpose The purpose of this study is to examine whether board gender diversity and other board characteristics affect earnings management practices of top public companies in Kazakhstan. Design/methodology/approach The study analyzes data of top public companies for the period 2010-2016. Data on corporate governance were manually collected from annual reports and investment memorandums, and financial data were collected from audited financial statements. Findings The empirical results show that companies with greater board gender diversity are more effective in constraining earnings management. The findings also indicate that companies with larger boards adopt a more restrained approach to earnings management practices, thus supporting the theoretical framework of the study. However, the results provide weak evidence of the association between board independence and earnings quality. Originality/value This study is the first to investigate the relationship between gender diversity and earnings management in emerging markets such as Kazakhstan that offers managerial and policy implications.

Internal control quality and voluntary disclosure: does CEO duality matter?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hichem Khlif ◽  
Khaled Samaha ◽  
Ines Amara
Keyword(s):  
Internal Control ◽  
Voluntary Disclosure ◽  
Positive Impact ◽  
Emerging Market ◽  
Annual Reports ◽  
Structural Power ◽  
Ceo Duality ◽  
Content Type ◽  
Corporate Reporting ◽  
Control Quality

PurposeThe authors examine the association between internal control quality (ICQ) and voluntary disclosure and test whether chief executive officer (CEO) duality, as a proxy for CEO structural power, moderates such a relationship in an emerging market (Egypt).Design/methodology/approachICQ is measured using a survey of external auditors, while a content analysis approach is used to measure the level of voluntary disclosure in annual reports.FindingsBased on a sample of 512 firm-year observations over the period of 2007–2014, the authors document that ICQ is positively and significantly associated with voluntary disclosure, suggesting that better controls improve corporate reporting policy. In addition, CEO duality moderates the association between ICQ and voluntary disclosure since this positive relationship association becomes insignificant for companies characterised by CEO duality. These results remain stable after controlling for endogeneity (self-selection problem), political instability and industry characteristics.Research limitations/implicationsThe findings of the study provide preliminary evidence on the association between ICQ and voluntary disclosure, and how CEO structural power may affect this association. Future empirical investigations may extend this work to cover the relationship between ICQ and other attributes of corporate transparency including earnings quality and accounting conservatism.Practical implicationsThe findings highlight the need for Egyptian regulators to enact new rules obliging firms to communicate information about ICQ or charging auditors to report information about firm's ICQ in their reports. The results also alert policymakers about the adverse effect of combined leadership structure (CEO duality) since it mitigates the positive impact of ICQ on voluntary disclosure.Originality/valueThe authors contribute to internal control literature by exploring the association between ICQ and voluntary disclosure on an emergent unregulated market with respect to internal control disclosure. They also highlight how CEO duality, as a proxy for CEO power, mitigates the beneficial effect of ICQ on corporate reporting policy on the Egyptian stock exchange (EGX).

Enhancing performance by disclosing more: some evidence from Japanese companies

2018 ◽  
Vol 30 (1) ◽  
pp. 110-128 ◽  
Author(s):  
Sriyalatha Kumarasinghe ◽  
Mitchell Will ◽  
Yasuo Hoshino
Keyword(s):  
Dual Language ◽  
English Language ◽  
Value Relevance ◽  
Market Performance ◽  
Annual Reports ◽  
Global Reporting Initiative ◽  
Long Term Effects ◽  
High Tendency ◽  
Content Type ◽  
Japanese Companies

Purpose The purpose of this study is to investigate the value relevance of corporate social responsibility disclosures (CSRDs) in English language annual reports in Japanese companies. Based on the stakeholder theory framework, the long-term effects of CSRD on financial and market performance are examined. There is relatively little research dealing with actual CSR reporting in Japanese companies. Design/methodology/approach Using modified versions of those given by Ohlson (1995) and Ruf et al. (2001), six dimensions of CSRD based on the Global Reporting Initiative (GRI) guidelines and three different measures of performance data are used to examine the relationship between CSRDs and performance in 101 dual-language-reporting Japanese firms. Findings The paper finds that the more a company discloses CSR on labour, human rights and product safety and health in the company’s annual report, the more it is rewarded with a higher level of financial and market performance. Originality/value To the best of the authors’ knowledge, this is the first paper to provide evidence of the incremental value of GRI-based CSRD to both financial and market performance in companies with dual-language reporting in Japan, a country with a high tendency to follow the Western practice of CSRD.

scholarly journals The Role of Integrated Reporting in Emerging Market: Earnings Quality and Debt Maturity

2021 ◽  
Vol 25 (3) ◽  
pp. 380
Author(s):  
P.A.Pamungkas,Amrie Firmansyah, R.A.Qadri,Agung Dinarjito, Zef Arfiansyah
Keyword(s):  
Financial Services ◽  
Stock Exchange ◽  
Emerging Market ◽  
Earnings Quality ◽  
Debt Maturity ◽  
Annual Reports ◽  
Manufacturing Companies ◽  
Linear Regression Models ◽  
Integrated Reporting

The maturity structure of debt can have financial and operational consequences for a firm as debt maturity is a key aspect of financial flexibility. Moreover, debt maturity can impact a firm’s ability to undertake long-term productive investments and, as a result, affect economic activity. This study aims to examine the effect of earnings quality on debt maturity and the role of Integrated Reporting (IR) in moderating these effects. This study's methodology is a quantitative approach with multiple linear regression models and panel data. The sample employed in this study is manufacturing companies listed on the Indonesia Stock Exchange (IDX). The type of data employed in this study is secondary data sourced from financial statements and annual reports from 2016 to 2020. The sample selection using a purposive sampling method with the number of samples amounted to 595 firm-year observations. The results of this study suggest that earnings quality does not affect debt maturity. Additional tests show that income maximization companies tend to have shorter debt maturity. However, IR failed to moderate the effect of earnings quality on debt maturity. This study indicates that the Financial Services Authority (OJK) needs to conduct better monitoring and regulation to increase creditor protection through optimal debt policy disclosure from the companies.

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