Determinants of the Readability and Comprehensibility of Risk Disclosures

2019 ◽  
pp. 216-238
Author(s):  
Jonas da Silva Oliveira ◽  
Graça Maria do Carmo Azevedo ◽  
Augusta da Conceição Santos Ferreira ◽  
Susana Patrícia Henriques Martins ◽  
Cláudia Roberta de Araújo Alves Pinto
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
Impression Management ◽  
Management Strategies ◽  
Financial Statements ◽  
Listed Companies ◽  
Risk Information ◽  
Negative Association ◽  
Risk Disclosures

The chapter intends to determine if managers make use of impression management strategies to hide or obfuscate risk disclosures through the analyses of the risk information disclosed by Portuguese non-financial listed companies. A content analysis of the management reports, notes to the financial statements, and corporate governance reports of companies listed at Euronext Lisbon, in the years 2007, 2010, and 2013 was carried out. Findings indicate that the understandability of the risk information is positively associated with the company's size. Results also indicate that there is a negative association between the readability of risk information disclosed and the company's size and industry.

scholarly journals The Effect of Performance and Corporate Governance to Risk Disclosure among Listed Companies in Malaysia

2021 ◽  
Vol 16 (1) ◽  
pp. 119-161
Author(s):  
Ag Kaifah Riyard Kiflee ◽  
◽  
Mohd Noor Azli Ali Khan ◽  
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
Annual Report ◽  
Listed Companies ◽  
Board Independence ◽  
Risk Disclosure ◽  
Interaction Variable ◽  
Variable Content ◽  
The Relationship ◽  
Disclosure Practice

The objective of this study was to determine the presence of risk information within the annual report of Malaysian non-financial listed companies and empirically extend the current literature of corporate governance and risk disclosure by incorporating an interaction effect in the model. The study found that listed companies in Malaysia experienced a positive upward trend in terms of risk disclosure practice for 10 years (2008-2017). A total of 166 companies were randomly extracted from Main Board of Bursa Malaysia from 2008 to 2017. This study used content analysis, descriptive statistics and multiple regression to explain the relationship between corporate governance and risk disclosure with the effect of the interaction variable. The study also found positive and significant relationship between board independence, board size and board gender with risk disclosure practice. It is also revealed that attainment discrepancies positively influence the relationship between corporate governance and risk disclosure practices among listed companies in Malaysia. Keywords: risk disclosure, annual report, corporate governance, interaction variable, content analysis

Corporate governance and risk reporting: Indian evidence

2017 ◽  
Vol 32 (4/5) ◽  
pp. 378-405 ◽  
Author(s):  
Ridhima Saggar ◽  
Balwinder Singh
Keyword(s):  
Corporate Governance ◽  
Listed Companies ◽  
Risk Information ◽  
Ownership Concentration ◽  
Regulatory Regime ◽  
Risk Disclosure ◽  
Firm Level ◽  
Content Type ◽  
Board Characteristics ◽  
The Relationship

Purpose This study aims to measure the extent of voluntary risk disclosure and examine the relationship between corporate governance firm level quality in the form of board characteristics and ownership concentration’s impact on risk disclosure in the annual reports of Indian listed companies. Design/methodology/approach The method adopted in this study is automated content analysis, which is applied to a sample of 100 listed Indian non-financial companies to find out the extent of risk disclosure. Further, multiple linear regressions have been applied to find out the relationship between corporate governance firm level quality in the form of board characteristics, ownership concentration and risk disclosure. Findings The findings reveal that the total number of positive risk keywords surpasses negative risk keywords disclosure. The corporate governance mainsprings, namely, board size and gender diversity have a positively significant effect on risk disclosure, whereas ownership concentration in the hands of the largest shareholder insignificantly affects risk disclosure, but identity of the largest shareholder having ownership concentration negatively affects disclosure of risk information in the case of Indian promoter body corporate, foreign promoter body corporate and non-institutions in comparison to family ownership. Research limitations/implications This study relied on a set of 39 risk keywords for measuring the extent of risk disclosure. Further, it uses a sample of 100 companies to examine the effect of corporate governance on risk disclosure at one point of time. However, a longitudinal study can help in understanding risk disclosure adopted by Indian listed companies in a better manner. Practical implications The findings have implications for regulatory bodies such as the Securities and Exchange Board of India, which needs to strengthen corporate governance norms with respect to board characteristics and keep a check on ownership concentration for improving risk disclosure by companies. Originality/value To best of the authors’ knowledge, this study is a preliminary attempt linking two research lines in India, that is, corporate risk disclosure and corporate governance quality in the form of board characteristics and ownership concentration. The study identifies corporate governance firm level qualities which lead to divulgation of risk information by the companies pointing towards strengthening of regulatory regime in the country for improved corporate governance regulations adopted by listed companies.

scholarly journals Accountability Styles in State-Owned enterprises: The good, the bad, the ugly ... and the pretty

2019 ◽  
Vol 22 (2) ◽  
pp. 156-170 ◽  
Author(s):  
Sonia Royo ◽  
Ana Yetano ◽  
Javier García-Lacalle
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
Multidimensional Scaling ◽  
Central Government ◽  
Listed Companies ◽  
Financial Information ◽  
Public Access ◽  
Corporate Websites ◽  
Key Stakeholders ◽  
Website Content

Ensuring public access to the information that State-Owned Enterprises (SOEs) produce is necessary and corporate websites should be used for this purpose. However, there is a lack of research analyzing the accountability of SOEs. This paper aims to identify different accountability patterns among SOEs by carrying out an assessment of the e-disclosure levels of Spanish SOEs. For this purpose, a comprehensive website content analysis of 91 SOEs owned by the Spanish central government was carried out. Each website was analyzed for 60 items classified into 4 dimensions: 1) financial information, 2) information about objectives and strategies, 3) corporate governance and 4) usability. In order to identify different accountability patterns among SOEs, cluster, multidimensional scaling and Pro-Fit analyses were carried out. Results show that e-disclosure practices among Spanish SOEs are still in their infancy. Financial accountability is the main focus of SOEs’ disclosures and most are silent about their policies, objectives and corporate governance structures. The majority of them are still anchored in a narrow accountability style that only considers shareholders as the key stakeholders and they are a long way from fulfilling the OECD recommendation that they should be as transparent as listed companies. Furthermore, results show that enforcement of transparency-related legislation is scarce in Spain. Based on these findings, some recommendations to improve e-disclosure practices among SOEs are suggested. Garantizar el acceso del público a la información que generan las Empresas Públicas (EP) es necesario y las páginas web corporativas deberían utilizarse para lograr este objetivo. Sin embargo, no existen estudios académicos que analicen la rendición de cuentas por parte de las EP. Este trabajo pretende identificar diferentes estilos de rendición de cuentas en las EP, llevando a cabo una evaluación de los niveles de divulgación a través de Internet de las EP españolas. Para lograr este objetivo, se ha llevado a cabo un análisis de 91 EP de titularidad estatal. En cada página web se ha analizado la presencia de 60 atributos clasificados en 4 dimensiones: 1) información financiera, 2) información sobre objetivos y estrategias, 3) gobierno corporativo y 4) facilidad de uso. Para identificar los diferentes estilos de rendición de cuentas se han utilizado análisis cluster, escalas multidimensionales y Pro-Fit. Los resultados muestran que las prácticas de divulgación de información a través de Internet de las EP españolas todavía se encuentran muy poco desarrolladas. La rendición de cuentas de tipo financiero ocupa el principal foco de atención de las EP y en su mayoría no divulgan información sobre sus políticas, objetivos y estructuras de gobierno corporativo. La mayor parte están ancladas en un estilo limitado de rendición de cuentas que solo considera a los accionistas como principales agentes interesados y lejos de cumplir la recomendación de la OCDE de ser tan transparentes como las empresas cotizadas. Además, los resultados muestran que el cumplimiento de la legislación en materia de transparencia es escaso. Sobre la base de estos resultados, se sugieren algunas recomendaciones para mejorar las prácticas de divulgación de información a través de Internet en las EP.

scholarly journals Legal rules, shareholders and corporate governance. The European shareholder rights’ directive and its impact on corporate governance of Italian listed companies: The telecom S.P.A. case

2015 ◽  
Vol 12 (2) ◽  
pp. 394-398
Author(s):  
Sabrina Bruno
Keyword(s):  
Corporate Governance ◽  
Significant Role ◽  
Ownership Structure ◽  
Financial Statements ◽  
Listed Companies ◽  
Company Law ◽  
Shareholder Rights ◽  
Legal Rules ◽  
European Company Law ◽  
Foreign Institutional Investors

This paper investigates the role that shareholders may play in corporate governance by analysing the European Shareholder Rights’ Directive n. 36/2007/EC and the consequences of its implementation upon general meetings and ownership structure of Italian listed companies. It summarises the rules introduced by the n. 36/2007/EC Directive in European company law aiming at strengthening shareholders’ voice in general meetings on the assumption that this is a prerequisite for sound corporate governance. It then presents data of Italian general meetings from 2010 through 2014 to highlight a rise in attendance and voting in particular by foreign institutional investors especially on certain items (such as directors’ remuneration, election and dismissal, and approval of financial statements). Finally the study presents the Telecom S.p.a. case to show that the new provisions can overturn the ownership structure of Italian companies when there is a de facto control and, at the same time, may play a significant role in improving corporate governance by balancing the power of dominant shareholders

scholarly journals Sustainability Disclosure among Malaysian Shari‟ah-Compliant listed Companies: Web Reporting

2009 ◽  
Vol 3 (2) ◽  
pp. 160 ◽  
Author(s):  
Rapiah Mohammed ◽  
Kasumalinda Alwi ◽  
Che Zuriana Muhammad Jamil
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
Web Site ◽  
Listed Companies ◽  
Annual Reports ◽  
Environmental Index ◽  
Sustainability Disclosure ◽  
Governance Index ◽  
Social Environmental ◽  
The Web

This paper advances previous research of sustainability disclosure by focusing on information disclosed in the companies‟ web site rather than through annual reports.  Despite looking at the listed companies in general, this study attempts to consider the practice of disclosing sustainability information in the Malaysian Shari‟ah-Compliant listed companies, which represented 87% of the total listed securities or 64.3% of the market capitalization on Bursa Malaysia web site. This study used Islamicity Disclosure Index consists of Shari‟ah Compliance Indicator,<br />Corporate Governance Index and Social/Environmental Index, and the data is analysed using a content analysis. The results of the study suggest that the sustainability disclosure by Malaysian Shari‟ah-compliant listed companies fall significantly on corporate governance index themes, followed by social/environmental index themes. However, Malaysian  Shari‟ah-compliant listed companies did not clearly disclose the items under Shari‟ah compliance index. Contrary to our expectation, most of the companies disclose the items measured in the annual reports linked to<br />the companies‟ web site and are thus not fully in the web site.<br /><br />

scholarly journals Corporate governance and intellectual capital disclosure. An empirical analysis of the Italian listed companies

2016 ◽  
Vol 13 (2) ◽  
pp. 187-201 ◽  
Author(s):  
Maria Assunta Baldini ◽  
Giovanni Liberatore
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
Empirical Analysis ◽  
Intellectual Capital ◽  
Ownership Structure ◽  
Audit Committee ◽  
Listed Companies ◽  
Annual Reports ◽  
Board Composition ◽  
Competitive Position

Intellectual capital (IC) as well as disclosure of information on IC has in recent years gained importance. IC is the key issue in strengthening a firm’s competitive position and in achieving its objectives. The purpose of this study is to investigate some determinants of the disclosure of IC in annual reports. In particular the aim of this research is to analyse the internal mechanisms of corporate governance (board composition, role duality, ownership structure, auditor type and size of audit committee), which influence the intellectual capital disclosure in corporate annual reports for a sample of all listed Italian firms at 31st December 2010. It has been used a disclosure index as a dependent variable, (ICD), and the method used to measure it is content analysis.

scholarly journals RISK DISCLOSURES IN FINANCIAL STATEMENTS OF BANKS IN BOSNIA AND HERZEGOVINA

2019 ◽  
Vol 1 (18) ◽  
pp. 11
Author(s):  
Amira Pobrić
Keyword(s):  
Bosnia And Herzegovina ◽  
Qualitative Data ◽  
Financial Statements ◽  
Developed Countries ◽  
Risk Information ◽  
Risk Exposure ◽  
Negative News ◽  
The Uk ◽  
Risk Disclosures ◽  
Research Show

This study examines the practice of disclosing risk information in the financial statements of banks in Bosnia and Herzegovina. The research is carried out using the content analysis. The aim of the research is to determine the volume and characteristics of risk disclosures. The results of research show that banks in Bosnia and Herzegovina disclose less risk information than banks in developed countries, such as Canada and the UK. Most information is disclosed about credit risk. More quantitative than qualitative data is disclosed. The banks are focused on providing mandatory risk disclosures but they do not provide all mandatory disclosures. They primarily disclose past and time-neutral risk information. They are more likely to disclose positive and neutral news about risk exposure and risk management rather than negative news.

Analysis on corporate governance compliance standards in New Zealand – a qualitative study on disclosures using content analysis and interviews

2018 ◽  
Vol 26 (4) ◽  
pp. 505-525 ◽  
Author(s):  
Allan Chang
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
New Zealand ◽  
Listed Companies ◽  
Auditor Independence ◽  
Annual Reports ◽  
Small Country ◽  
Best Interest ◽  
Content Type ◽  
Code Of Corporate Governance

Purpose This paper aims to provide more insights into the standard of corporate governance in New Zealand. The study intends to uncover how a small country with a well-developed economy with a good system of law and order, good institutional set up and law enforcements and implements the principles contained in the FMA’s corporate governance guidelines in practice. Design/methodology/approach The study is a mixed study one where it employs case study content analysis and augmented by conducting interviews. Large companies are selected to ascertain the level of compliance of NZ companies towards their obligations to report on corporate governance practices within the organisation. At the first stage, the study uses content analysis and looks at contents of company annual reports and publications on websites to determine whether they had disclosed as intended by New Zealand’s corporate governance guidelines. Findings The study found that a high compliance was recorded in areas such as board composition and board committees and low compliance recorded in areas involving costly implementation or when the issue is sensitive such as disclosures regarding remuneration details of directors and what non-audit work was undertaken and whether it compromises auditor independence. Being a small country, NZ has performed well in attracting foreign investment due to its strong tradition of law enforcement and respect for regulations. With greater awareness of the importance of corporate governance to investors, companies may see the benefit of greater compliance with the corporate governance guidelines. This is in line with the stakeholder theory and resource dependency theory where companies will voluntarily disclose information on corporate governance, social and environmental performance over and above mandatory requirements to appease and manage their stakeholders. Research limitations/implications The sample size of this study represents 3 per cent of total listed companies in New Zealand, but the sample is approximately 10 per cent of local NZ listed companies (i.e. not dual listed in Australia). There are 36 large companies in the New Zealand stock market with market capitalisation of 1 billion and above. In addition, the companies selected for this study are well-known in New Zealand, and it is acknowledged that this can be a source of bias in my analysis. Practical implications As was revealed during the interviews with company’s senior officials, Australian companies have achieved a higher level of compliance with the code of corporate governance. In this regard, New Zealand will have to step up and follow Australia’s lead to ensure greater compliance with the New Zealand corporate governance principles and guidelines. It would be in the best interest of the company’s stakeholders if full compliance is achieved. Originality/value Studies on the level of compliance by New Zealand companies on their obligations to meet the full extent of disclosures as stipulated by the New Zealand corporate governance guidelines are rare. This study aims to ascertain the standard of corporate governance reporting in New Zealand and the company’s seriousness to comply or attempt to meet the requirements in the seven stipulated principles.

Impression Management Strategies in the Chairmen's Statements

2019 ◽  
pp. 199-215
Author(s):  
Jonas da Silva Oliveira ◽  
Graça Maria do Carmo Azevedo ◽  
Stéphanie Fernandes Pinheiro ◽  
Maria Fátima Ribeiro Borges
Keyword(s):  
Content Analysis ◽  
Financial Crisis ◽  
Organizational Performance ◽  
Impression Management ◽  
Financial Institutions ◽  
Management Strategies ◽  
Annual Reports ◽  
Crisis Period ◽  
The Individual ◽  
The Impact

This chapter assesses the influence of organizational performance in the adoption of impression management strategies in the Chairmen's statements of the Portuguese financial companies. It also evaluates the impact of the financial crisis on the adoption of impression management strategies. To this end, and using the content analysis of the Chairmen's statements included in the individual annual reports for 2006-2012 of 27 financial institutions, the authors conclude that even throughout the financial crisis period, Portuguese financial companies did not tend to adopt more impression management strategies. However, they have seen that in some years there is some evidence of its adoption.

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