Environmental disclosure on mandatory and voluntary reporting of Portuguese listed firms: the role of environmental certification, lucratively and corporate governance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Albertina Paula Monteiro ◽  
Cláudia Pereira ◽  
Francisco Manuel Barbosa
Keyword(s):  
Corporate Governance ◽  
Annual Report ◽  
Sustainability Reporting ◽  
Listed Companies ◽  
Mandatory Reporting ◽  
Environmental Disclosure ◽  
Voluntary Reporting ◽  
Environmental Certification ◽  
Content Type ◽  
Annual Reporting

Purpose This study aims to construct two environmental disclosure indices (EDI), one obtained from the mandatory reporting (annual report) and the other from the voluntary reporting (sustainability report), to compare their evolution. In addition, the authors developed and evaluated a conceptual model that aims to analyse if the two EDI are affected by industry, environmental certification, lucratively and corporate governance attributes. The legitimacy, signalling and voluntary disclosure theories are used to support the theoretical relationship between the company’s characteristics, corporate governance and environmental disclosure. Design/methodology/approach Using the content analysis technique, the authors have developed two indices to assess the level of environmental disclosure in the companies’ mandatory and voluntary reporting. In addition, to analyse the determinants of EDI, the authors applied the technique of multiple linear regression using panel data. Findings Based on Portuguese listed companies (Euronext-Lisbon), the results, from 2015 to 2017, exhibited an increase of 14.6% and 25.8% for the EDI obtained from the annual reports and for EDI obtained from the sustainability reporting, respectively. In addition, the results revealed that the environmental certification, lucratively, number of members on board and number and proportion of women of the board directors tend to affect the annual reporting EDI. Regarding the sustainability reporting EDI, the results showed that the environmental certification, lucratively and proportion of independent members of the board of directors have an impact on it. Research limitations/implications The study focuses on quantitative rather than qualitative disclosures and it brings some insights to the theoretical field. Practical implications The results obtained can assist corporate decision-making processes regarding the improvement of environmental disclosure, both on the mandatory annual report and on voluntary sustainability reports. Originality/value This study brings new perspectives to this topical issue in accounting. Originally, this study is applied to Portuguese listed companies and it shows different trends and determinants of environmental disclosure when included in the annual reporting or sustainability reporting.

scholarly journals Corporate Governance and Compliance of Integrated Reporting: Evidence from Malaysian Listed Companies

2019 ◽  
Vol 14 (2) ◽  
pp. 161-173
Author(s):  
Saiful Bakhtiar Masduki ◽  
Mohamad Hafizul Mohd Zaid
Keyword(s):  
Corporate Governance ◽  
Annual Report ◽  
Sustainability Reporting ◽  
Listed Companies ◽  
Governance Structure ◽  
Managerial Ownership ◽  
Main Role ◽  
Government Ownership ◽  
Integrated Reporting ◽  
The Relationship

Integrated reporting is an emerging practice progressively catching the consideration of organizations.The idea of sustainability reporting increased more significance in the companies’ annual report, a patternthat is implanted likewise in integrated reporting. The governance structure all the more precisely the boardof director is the main role to decide whether the company will issue an integrated report. Hence, thepurpose of this paper is to examine the relationship between corporate governance (managerial ownership,family ownership, institutional ownership and government ownership) and consistence of coordinatedintegrated reporting elements disclosure. To achieve this objective, we analysed the way in whichintegrated reports of 30 companies are following the guidance provided by the International IntegratedReporting Framework (IIRF). As a result, we noticed that most annual report scored the highest compliancelevel and consistence with the guidance of the IIRF. In addition, the result also demonstrated institutionalownership and government ownership positively affect and significance integrated reporting elementsdisclosure. Our findings contribute to comprehend the practice of integrated reporting and may havesuggestions for regulators in emerging countries for company sustainability reporting. Keywords: Integrated reporting; Sustainability reporting; Listed companies, Corporate governance

Environmental disclosure quality: examining the impact of the stock exchange of Malaysia’s listing requirements

2015 ◽  
Vol 11 (4) ◽  
pp. 904-922 ◽  
Author(s):  
A.H. Fatima ◽  
Norhayati Abdullah ◽  
Maliah Sulaiman
Keyword(s):  
Stock Exchange ◽  
Listed Companies ◽  
Mandatory Reporting ◽  
Annual Reports ◽  
Disclosure Quality ◽  
Environmental Reporting ◽  
Environmental Disclosure ◽  
Content Type ◽  
Environmentally Sensitive

Purpose – The purpose of this study is to investigate the environmental disclosure (ED) quality of public-listed companies (PLCs) in environmentally sensitive industries (ESI) in Malaysia in 2005 and 2009 (two years before and two years after the mandatory corporate social responsibility (CSR) requirement of Bursa Malaysia (BM)). BM (The Stock Exchange of Malaysia) has made CSR, including ED in annual reports mandatory since 2007. This study compares environmental reporting (ER) before and after the 2007 mandatory reporting requirement to determine if this command and control mechanism has had any effect on the quality of ED. Design/methodology/approach – The quality of ED was measured using a disclosure quality index adapted from various prior studies. The index consists of a total of 46 disclosure items grouped into 9 categories. Content analysis was utilized to extract data from the annual reports of 164 PLCs in ESI. Findings – Overall, the quality of ED improved in 2009 from that of 2005. More importantly, companies disclosed more quantitative environmental information in 2009 than in 2005. However, the average quality of ED was still low in 2009 compared to the overall potential score. Results provide some support for legitimacy as well as institutional theories. Research limitations/implications – The sample of the study consisted of listed companies in ESI only; the results cannot be generalized to other companies in non-environmentally sensitive sectors. Practical implications – Prior studies that used data before the mandatory CSR requirement by BM found ED in annual reports mainly declarative in nature, generally low on quality and with little quantifiable data. The results of the present study provide evidence of the positive impact of mandatory environmental reporting on ED quality. Originality/value – The use of a multi-theoretical perspective may offer a more meaningful explanation of ER behavior in Malaysia. The results of the study would provide the impetus for regulatory agencies in developing countries to perhaps consider legislating ER. The findings provide some evidence to support the influence of legitimacy and institutional factors behind improved ED of Malaysian PLCs. This outcome exhibits a positive influence on the government efforts in promoting sustainability. Finally, the study contributes to present a more up-to-date account of environmental commitment undertaken by Malaysian corporations through their environmental reporting, after the CSR mandatory listing requirement took effect in 2007.

Governance, firm-level characteristics and their impact on the client’s voluntary sustainability disclosures and assurance decisions

2015 ◽  
Vol 6 (1) ◽  
pp. 54-78 ◽  
Author(s):  
Michael Kend
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Audit Committee ◽  
Sustainability Reporting ◽  
Listed Companies ◽  
Matched Pair ◽  
Firm Level ◽  
Content Type ◽  
Assurance Services ◽  
Sustainability Report

Purpose – The purpose of this study is to consider three distinct bodies of literature and uses stakeholder theory as the premise of this study. The first deals with corporate sustainability reporting and voluntary disclosure behaviour, and corporate governance at the firm level, the second deals with the decision to utilize assurance services (voluntary adoption) and the third relates to the choice of auditor/assurance provider. Design/methodology/approach – This study investigates these issues using archival data from some of the Top 200 listed companies in 2010 from the countries Australia and the UK. The final matched-pair sample consists of 220 listed companies. Findings – The study finds that audit client size and the strength of corporate governance structures are significant in explaining the decision to produce a standalone sustainability report. Whereas few of these variables provide any explanatory value on the voluntary decision to assure the sustainability report, the existence of an active and diligent audit committee does have positive significance. Finally, the existence of an active and diligent sustainability committee is significant in explaining the choice of assurance provider where a member of the auditing profession was selected by the firm’s management. Originality/value – Few studies (if any), have found a link between governance characteristics, sustainability report production, and assurance provider. The current study attempts to address this knowledge gap, and also considers the assurance work by professionals outside the auditing profession, and identifies which governance and firm-level characteristics may explain demand for their assurance services. This current study, assists to understand the low incidence of assurance and what might be necessary to increase demand for this type of assurance.

scholarly journals Analysis of Compliance with the Mandatory Sustainability Report in Peruvian Listed Companies

2021 ◽  
Vol 16 (2) ◽  
pp. 84-100
Author(s):  
Julio Hernández-Pajares ◽  
Karina Pocomucha Valdivia
Keyword(s):  
Sustainability Reporting ◽  
Listed Companies ◽  
Mandatory Reporting ◽  
International Standards ◽  
The Other ◽  
Company Size ◽  
Voluntary Reporting ◽  
Compliance Level ◽  
Institutional Influence ◽  
Sustainability Report

Abstract Research on institutional influence on sustainability information indicates that organisations prepare reports voluntarily, following international standards. On the other hand, some countries’ regulation has requested the presentation of mandatory sustainability reporting for listed companies. In Peru, stock market regulations have established the mandatory sustainability report since 2016. The aim of this study is to analyse the nature and the level of compliance of listed Peruvian companies with the sustainability mandatory report at 2017 and 2018. Further, the study seeks to analyse whether company size, profitability, indebtedness, sector, voluntary report, and transnational nature determine the level of compliance with mandatory reporting. The results indicate that the level of reporting compliance is not high; the greatest incidence of fulfilment occurs with respect to reporting labour performance, with suppliers and clients, with a high regulatory and sectoral institutional influence. Likewise, size, profitability, sector, and the companies’ voluntary reporting experience are determinants of the compliance level of mandatory sustainability reporting.

scholarly journals Sustainability Reporting Practices: Evidence from Bangladesh

2017 ◽  
Vol 7 (2) ◽  
pp. 61
Author(s):  
Sumaiya Akhter ◽  
Pappu Kumar Dey
Keyword(s):  
Human Rights ◽  
Content Analysis ◽  
Community Development ◽  
Annual Report ◽  
Sustainability Reporting ◽  
Listed Companies ◽  
Employee Benefits ◽  
Global Reporting Initiative ◽  
Reporting Practices ◽  
Product Responsibility

The objective of this paper is to examine the nature and extent of sustainability reporting practices by the listed companies in Bangladesh. In order to fulfill this objective, the research has examined the content analysis of annual report (2015-2016) and website of the top 50 listed companies (according to market capitalization). Based on Global Reporting Initiative (GRI) G4 guidelines, the study investigates three broad areas i.e. economic, environmental and social with 40 indicators. The findings of the study demonstrate that organizations in Bangladesh address few sustainability issues. Companies focus more on community development which is 90%, followed by employment and employee benefits (67%). The level of disclosures in website is meagre where only 26% of the sample companies disclose at least one indicator. Organizations’ attention on issues like environment, human rights and product responsibility is limited in relation to other issues. The extent of disclosure is also poor that is 66% of the companies use less than 25 sentences in sustainability reporting. Moreover, only 16% of the sample companies use separate sustainability reporting section. The limited disclosures on sustainability issues may be because of voluntary sustainability reporting in Bangladesh.

Relationship between corporate governance and audit switching: Iranian evidence

2017 ◽  
Vol 59 (5) ◽  
pp. 673-686
Author(s):  
Mahdi Salehi ◽  
Ali Asgar Alinya
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Stock Exchange ◽  
Listed Companies ◽  
Panel Analysis ◽  
Cross Sectional ◽  
Content Type ◽  
Effective Factors ◽  
Dependent Variables ◽  
The Relationship

Purpose This paper aims to investigate the relationship between corporate governance and auditors switching of listed companies on the Tehran Stock Exchange. Design/methodology/approach To achieve the objectives of this study, 12 hypotheses developed which and tests the relationship between corporate governance and selecting and switching auditors in Iran during 2008-20014 by selecting 116 listed companies on the Tehran Stock Exchange. To test the hypotheses, the cross-sectional time-series nature of research variables data, panel analysis is used. Also, to investigate the relationship between independent and dependent variables in each year, the logistic regression is used. Findings The results of the study indicate that there is a weak relationship between corporate governance auditors switching. Therefore, it could be concluded that there are some other effective factors on which selecting and switching auditors in studied companies are more dependent. Originality/value The current study is almost the first study which has been conducted in Iran, so the results of the study may be beneficial to the Iranian conditions as well as other developing countries.

Materiality assessment: the case of Latin American listed companies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yully Marcela Sepúlveda-Alzate ◽  
María Antonia García-Benau ◽  
Mauricio Gómez-Villegas
Keyword(s):  
Latin American ◽  
Social Issues ◽  
Construction Materials ◽  
Field Research ◽  
Principal Component ◽  
Sustainability Reporting ◽  
Listed Companies ◽  
Future Research ◽  
Content Type ◽  
Sustainability Reports

Purpose This paper aims to propose a measurement of the materiality of environmental, social and governance information (ESG) reported by listed companies belonging to sensitive industries in Colombia, Mexico, Brazil, Chile and Argentina. This analysis is carried out from the insights of stakeholder theory, legitimacy theory and institutional theory. The research questions addressed are: What type of information is considered as material by Latin American companies? Does this information respond to the environmental and social issues within the context of Latin American companies and the needs of their stakeholders? Design/methodology/approach A materiality index is developed from principal component analysis and factor analysis, which are multivariate analysis statistical techniques used in various fields to develop indices. The designed index examines materiality in the sustainability reports of 65 companies for 2017 and 67 companies for 2018. These firms belong to the energy, mining, chemical, construction, construction materials and public services industries in Colombia, Mexico, Chile, Argentina and Brazil. Findings The results show medium-high materiality indices, mostly in Chilean, Mexican and Colombian companies. In addition, issues such as water management, climate change and occupational health and safety are particularly interesting for companies. For the two years studied and from the perspective of material aspects for the company and its stakeholders, energy, mining and utilities (drinking water and sewage) sectors obtained the highest scores. This shows that the disclosure of ESG information is higher in industries related to the exploitation of natural resources that cause adverse effects on the environment such as extractive industries. Both the analysis presented in this paper and the materiality measurement developed, allow social responsibility managers to have a standard on the level of importance allotted to the different topics disclosed in sustainability reports. Additionally, this study provides a perspective of the material issues recognized by sensitive industries with great environmental impact. Similarly, an analysis of the issues considered material by stakeholders is provided. This allows such issues to be compared, identifying similarities and differences among the issues regarded as material by a company and its stakeholders. Practical implications The paper opens the debate is open as to whether the information disclosed response to the needs of stakeholders or whether, on the contrary, the materiality analysis is a process that emerges simply from the interests of the company. These demands for qualitative and field research to complement quantitative studies such as this one to research the stakeholders’ engagement processes in context. Social implications The paper’s purpose a challenge for future research is to strengthen the use of various methodologies that allow knowing the participation processes in the definition of materiality in the ESG information and the companies’ engagement with stakeholders. This stimulates research in the region, which is still in its infancy. Originality/value The international literature contains few studies related to the assessment of materiality for sustainability reporting. So this paper contributes proposes measurement of materiality for ESG information.

scholarly journals The board of directors and firm performance: empirical evidence from listed companies

2019 ◽  
Vol 19 (3) ◽  
pp. 508-551 ◽  
Author(s):  
Alessandro Merendino ◽  
Rob Melville
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Agency Theory ◽  
Ownership Structure ◽  
Listed Companies ◽  
Independent Directors ◽  
Board Structure ◽  
Board Size ◽  
Ceo Duality ◽  
Content Type

PurposeThis study aims to reconcile some of the conflicting results in prior studies of the board structure–firm performance relationship and to evaluate the effectiveness and applicability of agency theory in the specific context of Italian corporate governance practice.Design/methodology/approachThis research applies a dynamic generalised method of moments on a sample of Italian listed companies over the period 2003-2015. Proxies for corporate governance mechanisms are the board size, the level of board independence, ownership structure, shareholder agreements and CEO–chairman leadership.FindingsWhile directors elected by minority shareholders are not able to impact performance, independent directors do have a non-linear effect on performance. Board size has a positive effect on firm performance for lower levels of board size. Ownership structure per se and shareholder agreements do not affect firm performance.Research limitations/implicationsThis paper contributes to the literature on agency theory by reconciling some of the conflicting results inherent in the board structure–performance relationship. Firm performance is not necessarily improved by having a high number of independent directors on the board. Ownership structure and composition do not affect firm performance; therefore, greater monitoring provided by concentrated ownership does not necessarily lead to stronger firm performance.Practical implicationsThis paper suggests that Italian corporate governance law should improve the rules and effectiveness of minority directors by analysing whether they are able to impede the main shareholders to expropriate private benefits on the expenses of the minority. The legislator should not impose any restrictive regulations with regard to CEO duality, as the influence of CEO duality on performance may vary with respect to the unique characteristics of each company.Originality/valueThe results enrich the understanding of the applicability of agency theory in listed companies, especially in Italy. Additionally, this paper provides a comprehensive synthesis of research evidence of agency theory studies.

scholarly journals Impact of governance structures on environmental disclosures in the Middle East and Africa

2020 ◽  
Vol 20 (4) ◽  
pp. 739-763 ◽  
Author(s):  
Erhan Kilincarslan ◽  
Mohamed H. Elmagrhi ◽  
Zezeng Li
Keyword(s):  
Corporate Governance ◽  
Middle East ◽  
Gender Diversity ◽  
Governance Structures ◽  
Environmental Disclosure ◽  
Content Type ◽  
Environmental Disclosures ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

Purpose This study aims to investigate the impact of corporate governance structures on environmental disclosure practices in the Middle East and Africa (MEA). Design/methodology/approach The research model uses a panel data set of 121 publicly listed (non-financial and non-utility) firms from 11 MEA countries over the period 2010-2017, uses alternative dependent variables and regression techniques and is applied to various sub-groups to improve robustness. Findings The empirical results strongly indicate that MEA firms with high governance disclosures tend to have better environmental disclosure practices. The board characteristics of gender diversity, size, CEO/chairperson duality and audit committee size impact positively on MEA firms’ voluntary environmental disclosures, whereas board independence has a negative influence. Research limitations/implications This study advances research on the relationship between corporate governance structures and environmental disclosure practices in MEA countries, but is limited to firms for which data are available from Bloomberg. Practical implications The results have important practical implications for MEA policymakers and regulators. The positive impact of board gender diversity on firms’ environmental disclosures, policy reforms should aim to increase female directors. MEA corporations aiming to be more environmentally friendly should recruit women to top managerial positions. Originality/value This is thought to be the first study to provide insights from the efficiency and legitimation perspectives of neo-institutional theory to explain the relationship between MEA firms’ internal governance structures and environmental disclosures.

Does corporate governance influence earnings management in listed companies in Bahrain Bourse?

2018 ◽  
Vol 12 (4) ◽  
pp. 551-570 ◽  
Author(s):  
Bahaaeddin Alareeni
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Design Methodology ◽  
Empirical Support ◽  
Asian Country ◽  
Listed Companies ◽  
Discretionary Accruals ◽  
Board Independence ◽  
Content Type ◽  
Practical Implications

PurposeThis paper aims to consider data for listed companies in Bahrain Bourse to determine whether companies practice earnings management (EM). Further, the effect of a set of corporate governance characteristics on EM practices is examined.Design/methodology/approachThe EM level was measured using discretionary accruals (DA) [calculated using the Modified Jones (1995) Model]. The study sample consisted of 20 companies listed during the period 2011-2015. Panel regression model was used to test the study hypotheses and achieve the study aims.FindingsEM is negatively correlated with board size, confirming that a larger board is associated with a lower level of EM practices. Further, board independence is positively correlated with EM, suggesting that the larger the number of independent directors, the higher the level of EM practices. In addition, internal ownership is positively related to EM, confirming that the higher level of internal ownership increases EM practices. CEO duality does not appear to have any effect on EM in Bahrain Bourse. More interestingly, the findings reveal that companies practice EM through income-increasing DA.Research limitations/implicationsFinancial data and data related to other corporate governance characteristics are lacking.Practical implicationsThe results of this study provide empirical support for the development of new regulations and amendments and necessary corrective decisions regarding the effectiveness of applying corporate governance code in Bahrain Bourse. More specifically, this study reveals an urgent need for new amendments to restrict EM practices in Bahrain Bourse.Originality/valueThis study enriches the EM literature by covering Bahrain as an Asian country, which has not been sufficiently examined in relation to this topic. Further, this study provides a clear picture of the level of EM practices in Bahrain Bourse to multiple parties.

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