Chairman's Statement Research Articles

Investigating the development of narratives in directors' reports: an analysis of Barilla over six decades

PurposeThis research explores how contextual elements and significant events influence the changing storylines within a company's directors' reports spanning a period of six decades. These elements and events encompass the internal dynamics of the family that owns the company, industry-specific advancements, political and socioeconomic climates, and explicit guidelines related to corporate reporting.Design/methodology/approachThis research employs a case study methodology to analyse the directors' reports of Barilla, a prominent Italian food manufacturer, within the theoretical framework of historical institutionalism. A systematic content analysis is conducted on sixty directors' reports published between 1961 and 2021. The study also identifies and examines significant contextual events within this six-decade period, which are linked to four key institutional factors.FindingsBased on the research findings, the directors' reports exhibited notable fluctuations throughout the studied timeframe in reaction to shifts in the institutional setting. Our investigation highlights that each institutional element experienced crucial pivotal moments, and given their interconnected nature, modifications in one factor impacted the others. It was noted that these pivotal moments resulted in alterations in the directors' reports' content across various thematic areas. Additionally, despite Barilla being a multinational company, it was found that national events within Italy had a more pronounced influence on the evolving narratives than global events.Originality/valuePrevious research on directors' reports or chairman's statements has primarily focused on the influence of macro-level institutional factors on the narratives. In contrast, our study considers both macro-level and micro-level institutions, specifically examining the internal events within a family business and how they shape the content of directors' reports. Our study is also distinctive in its analysis of specific critical junctures and their interactions with the investigated institutional factors. Additionally, to the best of our knowledge, few existing studies span a timeframe of sixty years, particularly concerning an Italian company.

The moderating effect of corporate governance on readability of the chairman's statement: an analysis of Jordanian listed companies

The moderating effect of corporate governance on readability of the chairman's statement: an analysis of Jordanian listed companies

Does corporate governance influence readability of the report by the chairman of the board of directors? The case of Jordanian listed companies

AbstractThis study investigates whether readability of the president's statement is linked to both company performance and factors related to corporate governance in an emerging market context. We analyse Jordanian manufacturing companies listed on the Amman Stock Exchange (ASE) during the period 2017–2021. An exploratory study using panel data from ASE, parametric correlations, and regression models shows the relationship between readability of the president's statement, corporate governance, and characteristics of the board of directors. The results indicate that corporate governance significantly moderates readability of the president's statement and the firm's performance. The results also show a relationship between readability of the chairman's statement and directors' accounting experience and confirm that independence of the board of directors and concentration of ownership affect readability of the accounting disclosures in the chairman's statement. Finally, poor board compliance significantly mitigates the association between board features and readability of the chairman's statement. These findings help to explain how and why firms adjust their information disclosure and transparency practices, affecting corporate reporting credibility and efficacy. This study is one of few to examine how board features affect readability of the president's statement within the Jordanian legal framework, which is plagued by poor board compliance due in part to constant amendments.

An analysis of the relationship between readability of the chairman's statement and firm financial performance in South Africa

Stakeholders receive a comprehensive message that includes financial information, non-financial information, and a forecast for the future. Chairman’s disclosure is susceptible to manipulation by directors resulting to less transparency and thereby misleading the stakeholders. An evaluation of the chairman's messages in relation to financial performance is conducted in this study. The study examined the top 40 listed companies on the Johannesburg Stock Exchange for the year 2021, using the Gunning Fog Index as a measure of readability of the chairman's statement and Return on Equity (ROE) as a measure of financial performance. In order to determine the relationship between the chairman's statement readability and the company's financial performance, multiple linear regression was applied. This study found that as company performance increases, readability becomes more difficult. In contributing to existing literature, the study examines how the chairman's statement is correlated with financial performance from a South African viewpoint.

A Contrastive Appraisal Analysis of the Chairman's Statements in ICBC's and Citigroup's Corporate Social Responsibility Reports

A Contrastive Appraisal Analysis of the Chairman's Statements in ICBC's and Citigroup's Corporate Social Responsibility Reports

Role of socioemotional wealth (SEW) in the internationalisation of family firms

PurposeFamily firms' desire to preserve and uphold socioemotional wealth (SEW) makes their internationalisation a complex phenomenon. Despite the significance of SEW in guiding family firms' internationalisation decisions, the literature in the underlying research stream is still scant and inconclusive. Thus, the purpose of the study is to gain preliminary insights about various dimensions of SEW and its impact on family firms' degree of internationalisation.Design/methodology/approachThe study employs the multi-case study research design. The multidimensional SEW scale developed by Berrone et al. (2012) is used to calculate the SEW scores for four prominent Indian family businesses through the content analysis of Chairman's Statements for a period of 13 years (2007–08 to 2019–20). Further, the study examines the relationship between SEW and family firms' degree of internationalisation through two non-parametric tests: Somers' D and Kendall-Theil regression.FindingsThe results reveal the prevalence of various dimensions of SEW in family businesses. They also indicate that different FIBER dimensions are prioritised differently in family businesses. Finally, the authors observe that there exists a negative relationship between SEW and internationalisation of family businesses, indicating that SEW hinders the internationalisation of family firms.Research limitations/implicationsThe study lends to the readers, the understanding that SEW plays a significant role in the internationalisation of family firms; thus, some modification might be needed in the existing international business theories in order to explain the role of peculiar family characteristics in the internationalisation decisions of family firms. Further, since SEW hinders the internationalisation of family firms, it raises a question for researchers and family business leaders: Do family firms need to work on their socioemotional ties to avoid making suboptimal decisions?Originality/valueThe study is a response to the call by Cleary et al. (2019) to utilise the results of content analysis of SEW in determining its impact on the family firms' external events. Majority of the studies are still using univariate measures (e.g. percentage of family ownership) to capture SEW. However, this study attempts to calculate the SEW scores of the family firms along these FIBER dimensions through content analysis. This helps in scrupulously capturing the impact of SEW in the internationalisation of family firms.

The influence of audit committee characteristics on impression management in chairman statement: Evidence from Malaysia

After the emergence of financial scams like Enron, WorldCom and Toshiba, the researchers have emphasized the significance of the audit committee (AC) in curtailing the earnings management (EM). The...

Rethinking “Oil Nationalism”

In the early twentieth century, Great Britain began a new wave of imperialism, focusing on areas in the Middle East strategic to enhance their trade. Iran was one of the countries in which Britain gained enormous power and influence. This power was derived from its control of Iranian oil resources, through the Anglo Iranian Oil Company (AIOC). After many years of AIOC producing oil in Iran with Iranian Government support, a wave of economic nationalism led to the nationalization of AIOC in 1951 by the Iranian Prime Minister Musaddiq. The nationalization of the AIOC angered the British and seemed part of a growing pattern of pressure on their interests culminating in wresting Musaddiq from the control of the oil industry. As a result, in considering the above effects, by using AIOC as a case study, a textual analysis of the Chairman's Statement to Shareholders is conducted and the validity of the Statements is reappraised with reference to historical evidence.

Does financial crisis affect financial reporting of good news and bad news?

The objective of this paper is to examine the impact of financial crisis on financial reporting of good news and bad news in the UK annual report narrative sections. We use the manual content analysis to measure levels of good news and bad news information for a sample of 110 chairman statements of financial institutions. Our sample covers a five year period (2006–2010), which represents the global financial crisis year (2008), two years before the crisis and two years after the crisis. Our regression analysis shows that UK financial companies disclose more good news information than bad news information. We also find that the crisis affects the financial reporting of good news and bad news. These results suggest that after controlling for other firm characteristics and corporate governance mechanisms, UK financial companies disclose more bad news information during and after the crisis period, while they disclose less good news during these periods.

‘Impression management’ in Chinese corporations: a study of chairperson's statements from the most and least profitable Chinese companies

The purpose of this study is to investigate whether ‘impression management’ exists in Chinese corporate annual reports. Despite flourishing in the Western context, the literature regarding impression management has not yet received any significant development pertinent to China and its cultural norms. The following question is raised: do the most profitable Chinese listed companies disclose information in their chairmen's statements in a way that is significantly different from those of least profitable companies? The results indicate impression management motives do underlie chairman's statements in the Chinese context in a number of ways, as we suggest in this contribution.

Natural gas matters: Gas‐Electric interaction steps up a notch

AbstractIn April, in this space, I discussed the effort undertaken by the North American Energy Standards Board (NAESB), in response to the National Petroleum Council (NPC), to address “gas‐electric harmonization,” a rationalization of the interaction between the business structures of the natural gas and electric power industries. Since that time, there have been a number of developments as the NAESB effort has moved forward. First, in June Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff announced a series of five regional conferences designed to provide input to the commission on the same issues. The chairman's statement was really pretty short and to the point, the key paragraph being the following:

Chairman's Statement to the Subcommittee on Crime, Terrorism, and Homeland Security, House Judiciary Committee, October 12, 2011

Chairman's Statement to the Subcommittee on Crime, Terrorism, and Homeland Security, House Judiciary Committee, October 12, 2011

‘Metaphoring’ people out of this world: A Critical Discourse Analysis of a chairman's statement of a UK defence firm

We introduce Critical Discourse Analysis (CDA), an interdisciplinary approach to analysing written and spoken texts, which provides accounting researchers with a range of resources to analyse corporate narrative documents more systematically and in more detail from a linguistic perspective. CDA addresses how the content and the linguistic features of texts influence, and are in turn influenced, by the contexts of text production, distribution, reception and adaptation, and by the wider socio-economic context in which texts are embedded. We apply Fairclough's (2003, 2006) Dialectic-Relational approach to the analysis of a chairman's statement of a UK defence firm. The focus of analysis is on the grammatical devices used to represent organisational activities and outcomes in ways which obfuscate social agency (impersonalisation) and to evaluate social actors, entities, and social events (evaluation). We find that impersonalisation and evaluation are used strategically to guide organisational audiences’ interpretations of financial performance and to legitimise and normalise violence and destruction by depicting it in an abstract and sanitised manner.

Chairman statement characteristics and firms performance: a study of Malaysian construction companies

Chairman statement in the corporate annual report is classified as narrative accounting and until today it remains as voluntary disclosure. Without guidelines by the accounting standards setters and close monitoring by the regulators, it is hypothesised that company management may exaggerate the qualitative explanation in the chairman statement to impress various groups of stakeholders. In 2008, as sub prima crisis effecting global economic, and eventually reaches Malaysian shore, one of the badly suffered sectors in construction industry. Therefore, this study attempts to examine how these construction companies disclosure their chairman statement in order to reflect the negative impact towards their bottom line financial reporting. Specifically, the study investigates whether there is a significant different between profitable and not profitable construction companies as well as increased or decreased revenue construction companies associate with the characteristics of chairman statement in the corporate annual report. The independent sample t-test showed that there are no significant different, except profitable construction companies tend to provide more picture and graphic in the chairman statement section while reporting their bottom line performance.

Comment on “International and Regional Cooperation: Asia's Role and Responsibilities”

Comment on “International and Regional Cooperation: Asia's Role and Responsibilities”

The chairman's statements and annual reports: Are they reporting the same company performance to investors?

ABSTRACTThis paper analyses the chairman's statements of the top 50 and bottom 50 companies listed on the JSE ranked by percentage change in profit before taxation. The research examines whether companies with improving and declining performance report good and bad news in different ways. The findings are in line with expectations and both groups of companies show a preference to emphasise the positive aspects of their performance. Furthermore, both groups prefer to take credit for good news themselves, while blaming the external environment for bad news. Managers use accounting narratives in a self-serving manner, rather than reporting performance objectively. The research in this paper has implications for the current state of financial reporting whereby auditors do not formally audit but instead review the chairman's statement to ascertain its consistency with the financial statements.

Integrating corporate social responsibility and other strategic foci in a distributed production system: a transaction cost perspective on the North Sea offshore petroleum industry

PurposeThe purpose of the paper is to explore the challenges of integrating corporate social responsibility (CSR) with other strategic foci into the supply/contractor chain, both conceptually and empirically, with a focus on one sectorial case: the Norwegian upstream petroleum industry. It compares contradictory theories of strategic focus and explores their implications for the organisation of the supply chain and discusses challenges and solutions for operative CSR‐oriented supply chain managementDesign/methodology/approachThe empirical analysis, inspired by the cognitive mapping approach, seeks to elicit the strategic profiles of the oil majors and suppliers/contractors in the petroleum industry. This is based on textual analysis of core statements of overall business strategy such as the CEO's and the Chairman's statement letter to the shareholders. The paper also draws on research and workshops with petroleum companies and their suppliers in the North Sea, as well as contracting experts and researchers taking part in the EU‐TRENDS project which focused on satisfying Europe's future demands and needs for sustainable, secure, safe and clean energy supplies.FindingsThe strategic profiles of the petroleum companies and their suppliers/contractors indicate that, while they coincide on many points, there is considerable discrepancy as far as CSR and HSE are concerned. The suppliers/contractors tend to emphasise the technology dimension more strongly than the petroleum companies. HSE and CSR are, on average, strategically under‐communicated within the supply industry compared with the petroleum companies, but there is also considerable variation within each group.Research limitations/implicationsThe paper explores how transaction cost theory may help frame managerial challenges and approaches in integrating CSR consistently throughout supply chains. It shows some of the limitations of the “rationalist” model of industrial organisation both at the firm level and at the supply chain level and discusses possible expansions into broader managerial approaches.Practical implicationsThe paper highlights some of the managerial challenges and basic approaches for integrating CSR consistently throughout the value chain.Originality/valueThe originality of the article lies conceptually in linking the CSR literature to transaction cost theory of industrial organisation. Empirically the article presents new insights into strategic foci of the petroleum companies and their supply chain.

A Corpus Analysis of Text Themes and Photographic Themes in Managerial Forewords of Dutch-English and British Annual General Reports

This genre-based study comprises a comparative content analysis of textual and pictorial themes in a corpus of Dutch-English and British managerial forewords. It indicates that there are significant thematic differences between the Dutch-English CEO's statements, the British CEO's statements, and the British Chairman's statements and that these may be attributable to communicative and historical conventions as well as to current affairs in a particular business community. The present analysis, therefore, suggests that these managerial forewords cannot be considered as identical texts, although all are part of the same comprehensive document (i.e., the annual report). As such, this study suggests that text analysts, instructors, and practitioners in intercultural communication should be sensitive to both textual and contextual features for a full understanding of professional texts in intercultural discourse situations

Differential patterns of textual characteristics and company performance in the chairman's statement

Purpose – The purpose of this paper is to assess the effect of financial performance on the textual characteristics of the chairman's statement. In particular, given the increased motives for poorly performing management to engage in impression management, the paper focuses on whether companies' reporting strategies depend on underlying financial performance. Design/methodology/approach – The research questions are investigated by examining a range of textual characteristics in the chairman's statements of 100 extremely profitable and extremely unprofitable UK listed companies. Findings – The results in this paper indicate that the chairman's statement is subject to impression management techniques as managers' propensity to associate themselves with company financial results is associated with the firm's underlying financial performance. There is also some evidence that unprofitable companies focus more on the future, rather than on past performance. Research limitations/implications – The paper shows the results of this study are based on samples of extremely profitable or extremely unprofitable companies and thus represent the tails of the distribution; further research using random sampling could investigate the extent to which the findings hold for all companies. Additional factors, such as changes in board membership, could also be examined in future research. Practical implications – The research in this paper has implications for the current state of financial reporting whereby auditors do not formally audit, but instead review, the chairman's statement to ascertain its consistency with the financial statements. Originality/value – The paper will be of value to academic researchers in the field of impression management and to users of annual reports who may rely on the chairman's statement for decision making.

The chairman's statement in Malaysian companies

PurposeThe obfuscation hypothesis suggests that under‐performing firms will tend to obscure the meaning of their corporate narratives by deliberately adopting a textual complexity, most readily apparent through poor readability and the use of unnecessarily difficult language. This paper seeks to add to the literature in the area by comparing the textual complexity of corporate narratives, notably the chairman's statement, of main board and second board companies on the Bursa Malaysia (formerly known as the Kuala Lumpur Stock Exchange), with their financial performance, and also to examine the impact of company size, board membership and degree of statutory regulation on the readability of corporate narratives.Design/methodology/approachFollowing the existing literature this paper uses readability as a proxy for textual complexity, in addition to more direct measures, and seeks to examine relationships between textual complexity and various measures of financial performance.FindingsThe findings suggest that there are significant relationships between corporate language and financial performance, but that these are not consistent with the obfuscation hypothesis.Originality/valueThe findings are consistent with the suggestion that increased regulation and statutory monitoring of disclosures are associated with improved readability of narrative. They do not provide support for the obfuscation hypothesis.