The effect of ownership structure on social and environmental reporting in Nigeria: the moderating role of intellectual capital disclosure

Purpose This paper aims to examine the effect of ownership structure variables on social and environmental disclosure practice in Nigeria. The paper also investigates the moderating impact of intellectual capital disclosure on the relationship between ownership structure elements, social and environmental disclosure. Design/methodology/approach The paper adopted the Global Reporting Initiative (GRI) disclosure framework to extract social and environmental disclosure information from corporate social and environmental reports of 80 companies listed on the Nigerian Stock Exchange. The study spanned from 2012–2017. Management ownership, foreign ownership, block ownership and dispersed ownership are considered as determinants of social and environmental disclosure. A multiple regression analysis was used to test the relationships specified in the study. Findings The result of the descriptive analysis has shown evidence of a low-level disclosure of social and environmental information in corporate reports (annual reports and corporate social and environmental reports) of companies. From the regression analysis, block ownership, foreign ownership and dispersed ownership are found to enhance the disclosure of social and environmental information in the corporate report of companies. However, management ownership was found to be insignificantly related to social and environmental disclosure. The result also revealed that intellectual capital disclosure has a significant positive effect on the relationship between management ownership, foreign ownership and dispersed ownership, social and environmental disclosure. However, intellectual capital disclosure does not moderate the relationship between block ownership, social and environmental disclosure. Originality/value This paper is the first to empirically examine the moderating effect of intellectual capital disclosure on ownership structure variables, social and environmental disclosure. The result of the study offer researchers a better understanding of the impact of ownership structure variables on social and environmental disclosure. The findings are useful to researchers, corporate managers, policymakers and regulatory bodies.

The Effects of Blockholder Dispersion on the Informativeness of Earnings: Evidence from Korea

This paper studies the relationship between blockholder dispersion and the informativeness of earnings using a sample of Korean companies. Investors prefer less volatile and more sustainable earnings and managers have incentives to manage earnings to meet investor demand. We show evidence that firms with dispersed ownership, which are likely to suffer from high levels of information asymmetry, smooth earnings in order to relieve investors’ concerns regarding information asymmetry. Furthermore, our regression analyses on the relation between returns and future earnings reveal that earnings smoothing conducted by firms with dispersed ownership leads to higher informativeness of earnings. This study provides important implications for various financial statement users in interpreting firms’ earnings sustainability, especially in the East Asian countries where a wide spectrum of ownership concentration structure exists.

Shareholder Foundations of enterprises: the North European style of securing family businesses for the long term—rising up to the global challenge

This article explores how and why the traditional business succession system within family businesses needs to be reconsidered. Holding Foundations are generally overlooked although they provide a purpose-driven ownership structure with a stewardship governance that avoids family conflicts, taxation and dispersed ownership affecting the family business. In this article, the authors combine their experiences and insights from Denmark and the Netherlands with shareholder foundations of enterprises.

CSR reporting and ownership structure: Evidence from Italian listed companies

The paper empirically explores how firms’ Corporate Social Responsibility (CSR) disclosure varies according to their ownership structure. Three different kinds of ownership structures are considered: family firms (FFs), state-owned firms (SOFs) and firms with dispersed ownership (DOFs). It is the first study examining the relationship between CSR disclosure and ownership structure, which includes in the analysis also FFs and SOFs. The analysis is provided on a sample of 192 listed firms with reference to Italy, a suitable setting for the purpose of the study due to the considerable presence of both FFs and SOFs. Firstly, a content analysis on the CSR documents disclosed by the 192 firms is provided and then data are empirically analysed to test whether the ownership structure influences a firm’s CSR disclosure. Results show that FFs and SOFs disclose less CSR information and the explanation can be found in the lower level of agency problems they have to face. The paper contributes to the stream of literature about CSR disclosure, because it argues that the contents of CSR disclosure vary according to firm’s ownership structure and also to those about FFs and SOFs because it shows that the presence of a concentrated ownership lowers the level of CSR information disclosed.

Informational role of ownership concentration: evidence from the Casablanca stock exchange

Purpose The purpose of this paper is to provide empirical evidence on the informational role played by ownership concentration. Design/methodology/approach The authors use bivariate vector autoregressive models to document the informational role of ownership concentration. Findings The findings suggest that the returns of firms with concentrated ownership structure lead the returns of firms with dispersed ownership structure in Morocco during the period between 2004 and 2014. The authors argue that this lead-lag relationship arises because a better information environment in firms with concentrated ownership structure enables quick incorporation of relevant information. The results are robust under different information regimes. Originality/value The authors believe that this paper is one of the first evidence on the informational role of ownership concentration in Morocco.

Changing the Paradigm of Stock Ownership from Concentrated Towards Dispersed Ownership? Evidence from Brazil and Consequences for Emerging Countries

29 Northwestern Journal of International Law & Business, (2009)This paper analyzes micro-level dynamics of changes in ownership structures. It investigates a unique event: changes in ownership patterns currently taking place in Brazil. It builds upon empirical evidence to advance the theoretical understanding of how and why concentrated ownership structures can change towards dispersed ownership.Commentators argue that the Brazilian capital markets are finally taking off.The number of listed companies and Initial Public Offerings (IPOs) in the São Paulo Stock Exchange (Bovespa) has greatly increased. Firms are migrating to Bovespa's special listing segments, which require higher standards of corporate governance. Companies have sold control in the market, and the stock market has recently seen an attempted hostile takeover. This paper discusses these current developments and analyzes ownership structures of companies listed on Bovespa's listing segments based on data from 2006 and 2007. It provides the first evidence of the decline of ownership concentration in Brazilian corporations.There is, however, an important caveat: dispersed ownership is mainly found in Novo Mercado, the listing segment that requires the one-share-one-vote rule. This paper, then, investigates firms' migration patterns, and finds that eighty-five percent of Novo Mercado's firms are "new entrant" firms. Traditional firms have mostly migrated to Level 1, the least stringent corporate governance segment. Thus, there are two corporate worlds in Brazilian capital markets: new corporations that adopt proactive corporate governance patterns, and established corporations that retain their main patterns of corporate governance or ownership structure.This paper additionally explores the consequences of increased dispersion of ownership through private contracting, such as shareholders' agreements and bylaws. The evidence suggests an increasing reliance on shareholders' agreements to coordinate joint control and to bind directors' votes. Research also shows a growing adoption of anti-takeover devices in bylaws.Finally, this paper sheds light on the incentives that may alter preferences of controlling shareholders. This discussion also explains why controlling shareholders opt to create greater diversity of ownership structures. This analysis advances our knowledge of corporate structures in other emerging countries.

Determinants of Corporate Social Disclosures in Kenya: A Longitudinal Study of Firms Listed on the Nairobi Securities Exchange

This study which was exploratory in nature aimed to examine the extent to which firms listed on the Nairobi Securities Exchange disclosure social responsibility information and also to determine company and corporate governance variables that influence the Corporate Social Disclosures (CSD) practice in Kenya. Data on the disclosure index and company characteristics were obtained from the annual reports of the respective companies. A relationship between the disclosure index and the various company characteristics was determined. It was found that size, profitability, liquidity, industry in which a company operates have a positive influence on the level of CSD. In addition, a company that a dispersed ownership disclosed more information than a company with concentrated ownership. Gearing and country of origin were found to have no influence on the level of CSD.

Why Credit Ratings Serve a Greater Role in Emerging Economies than Industrial Nations

The agency problem attributed to dispersed ownership is also principally regarded as being that of the control over powerful management. Whilst there are conflicting views in respect of the degree of agency problems which arise under dispersed and concentrated ownership structures, it appears that additional or greater agency problems will eventually necessitate the need for greater monitoring. In recommending the external auditor's expertise as appropriate for addressing agency problems, this chapter draws attention to the audit committee's roles, presenting them both as vital and complementary corporate governance tools.

Measuring the agency costs of dispersed ownership: the case of repurchase initiations

Empirical investigations of the agency costs of dispersed ownership yield mixed results. A possible explanation for the lack of conclusive evidence is inaccurate measurement of the extent of the problem. We suggest that the extent of the problem be measured as theory suggests: by the wealth that managers commit to their firms. We examine the relative performance of different measures of the agency problem of dispersed ownership in the context of changes in payout policy affected by repurchase initiations. We find that the suggested measure – managerial equity wealth – can explain better than any other measure the market reaction to repurchase initiations. We also find that market reaction to repurchase initiation is smaller for firms with high media coverage than for firms with low media coverage and that repurchases that follow a large rise in stock prices elicit relatively small market reactions. Lastly, we find that market reaction to repurchase announcements decreases with the dividend yield of the firm, which suggests that share repurchases are relatively less important when dividends are used to alleviate the problems of free cash flows. Our results are robust to several modifications of the main test.