Disclosure of Timely and Forward-Looking Statements and Strategic Management of Major Institutional Ownership

Abstract

This paper explores whether organisations that make more transparent corporate disclosures experience more stable patterns of institutional ownership. It builds on previous research in this area to develop a revised methodology for providing a more direct linkage between disclosure and the strategic planning goals of the organisation. While as expected there is consistent evidence that additional disclosures are associated with short-term increased share price volatility, the author suggests that increased corporate disclosure of industry-specific, non-financial and non-routinised information does increase the stability of the holdings by major institutional investors. I gratefully acknowledge assistance from Jennifer Ireland, Alexander Shyla and Bobby Rakhit. I would also like to thank Sarah Deans, Robert Hodgekinson, Andrew Jones, Brian Singleton Green, Richard Taffler and seminar participants at Cranfield University, London School of Economics and the University of Aberystwyth. The author gratefully acknowledges research funding support from CIMA (Chartered Institute of Management Accountants).