Management Information Disclosure Research Articles

Enhanced management information disclosure responsibilities and corporate risk-taking: Evidence from the accountability system for errors in China

Enhancing management's responsibility for information disclosure can improve a firm's risk-taking by improving its resource allocation efficiency, but it can also reduce firm risk-taking by increasing managers' risk aversion. After the regulation change from the China Securities Regulatory Commission to require the listed companies to establish an accountability system for material errors in information disclosure of annual reports (hereinafter referred to as the “accountability system for errors”) in late 2009, the risk of misreporting became substantially higher. This paper explores how the accountability system for errors with strengthened management's responsibility for information disclosure affects corporate risk-taking. We find that the accountability system for errors significantly reduces corporate risk-taking, especially idiosyncratic risk, and the impact is greater in firms with short-term CEO tenure and high-tech firms. The improved information environment and increased market pressure are the mechanisms by which the accountability system for errors reduces corporate risk-taking. Further research shows that after the policy change, firms reduce R&D expenditures and output and are more likely to diversify risk through fixed asset investment and diversified mergers and acquisitions. After establishing the accountability system for errors, the higher level of risk-taking will lead to lower CEO compensation and a higher probability of CEO dismissal. This paper enriches the research on corporate governance reform related to strengthening management responsibility. Our research also provides references and guidance for relevant regulatory authorities and listed companies in emerging markets to improve their corporate governance.

Environmental backgrounds of CEOs and corporate environmental management information disclosure: The mediating effects of financing constraints and media attention

AbstractIn the context of the global economy's green and low‐carbon development, companies are paying increasing attention to environmental management. This study compiles statistics on Chinese listed firms from 2010 to 2020 and examines the influence of CEOs' environmental background on corporate environmental management information disclosure based on imprinting theory. It found that CEOs with environmental backgrounds are more willing to disclose corporate environmental management information, and the level of disclosure is high. By attracting media attention and reducing the company's financing constraints, CEOs with an environmental background can enhance the level of corporate environmental management information disclosure, according to the analysis of the impact mechanism. Further research revealed that CEO environmental background promoted corporate environmental management information disclosure more significantly in state‐owned and heavily polluting enterprises.

Tracking Waste Management Information Disclosure Behavior Connected to Financial Performance through Moderating Variables.

The current challenges of a circular economy exert a high pressure on manufacturing companies that generate waste to track and implement policies to reduce them and eliminate the toxicity of residues. Hence, the purpose of this study is to analyze the waste management information disclosure linked to the financial performance of companies and test the moderating effect of internal and external variables. The average waste management information disclosure index shows a poor disclosure score for the analyzed period, however, the waste disclosure index after reaching a minimum threshold in 2019 recorded an encouraging increase at the end of 2021. Applying the fixed effects model, ordinary least squares, and two-stage least squares method, the results revealed a positive and statistically significant relationship between management information disclosure and the return on assets, while for the current ratio the connection has been invalidated. A statistically significant influence of the environmental-sensitive industry status, board size, and productivity on the moderating variables was found for the return on assets, while for current ratio, there was none. As for the alternative metrics of financial performance, the results showed that a higher degree of management information disclosure will increase the return on equity and earnings per share, while in the case of liquidity, the results are not conclusive.

Lessons from failure: Pollution blacklisting and firm's green innovation

AbstractThis article investigates the impact of pollution blacklisting on firm green innovation (GI) by a unique information disclosure project from 782 Chinese listed firms in heavily polluting industries during 2015–2019. Our research found that pollution blacklisting establishes a poor environmental perception and puts firms under greater legitimacy pressure than their peers, forcing them to go beyond compliance through more substantial long‐term solutions like GI to reestablish environmental legitimacy and win social support again. For firms with high levels of media coverage, the positive effect of pollution blacklisting on GI is strengthened, while for firms with bureaucratic political connections, the positive effect is weakened. The findings have important theoretical and practical implications for GI management and relevant information disclosure practice.

Corporate Energy Management and Voluntary Carbon Information Disclosure in China

Corporate Energy Management and Voluntary Carbon Information Disclosure in China

Too Good to Be True: Impression Management and Integrity's Self-Governing Mechanism in M&As

In this paper, we study the influence of corporate culture (i.e., integrity) on impression management around M&As. Building on prior M&A literature, we argue that M&As provide a setting in which managers are prone to follow managerial self-interests and make use of impression management. Using a sample of 2,269 M&A transactions from S&P 500 firms between 2003 and 2018, we provide evidence that higher levels of integrity limit managerial use of impression management (i.e., manipulative disclosure behavior) during M&A announcements. We find an even stronger relationship in contextual situations that increase the risk of managerial self-interests in M&As. Our evidence suggests that integrity limits the risk of managerial self-interests in situations with high managerial discretion. We conclude that integrity acts as a self-governing function in situations that are hard to monitor by traditional governance mechanisms. Our study enriches prior research on impression management and voluntary information disclosure around M&A announcements with a perspective on the cultural value of integrity.

Economic Policy Uncertainty and Enterprise Earnings Information Content: Evidence from China

Earnings information as a key factor affecting investors' decisions, has attracted much attention from scholars in recent years. Based on the data of A-share listed companies from 2002 to 2019, this paper examines the impact of economic policy uncertainty on earnings information content of enterprises through multiple linear regression, empirical results show that: 1. the benchmark results show that the uncertainty of economic policy significantly improves the earnings information content of enterprises. The above conclusions still hold after changing the uncertainty index of economic policy, carrying out the lag and lag treatment during the uncertainty of economic policy, and carrying out the robustness test by changing the measure method; 2. mechanism studies show that enterprises are more likely to attract investors' attention under uncertain environment, and the supervision pressure from investors forces enterprises to reduce earnings management and increase information disclosure, thus enhancing investors' trust in corporate earnings; 3. the expansion study found that the more high-quality accounting information, so as to establish a good corporate reputation among investors. The research conclusion not only expands the existing literature on the impact of economic policy uncertainty on the content of corporate earnings information, but also provides a new perspective and new empirical evidence for understanding whether and how the uncertainty of economic policy will affect the content of corporate earnings information, and has a certain practical significance.

An analysis of the relation between enterprise risk management (ERM) information disclosure and traditional risk measures in the US banking sector

The purpose of this article is to validate the quality and the relevance of enterprise risk management (ERM) information disclosure by analyzing the relation between the different dimensions of ERM disclosed in the annual report and the traditional measures of risk in the US banking sector. We use content analysis to measure ERM dimensions and a correlation analysis to document the links between risk exposure, consequences, and strategies (Aebi, Sabato, & Schimd, 2012), and the traditional measures of risk (Schnatterly, Clark, Howe, & DeVaughn, 2019) disclosed in the annual reports from 2006 to 2009. We then separately make the analysis for the period before and after the crisis to identify any effect of the crisis on ERM information’s ability to predict and reflect the banking sector’s traditional risk (Maingot, Quon, & Zéghal, 2018). Our results reveal the overall validity of ERM information in assessing traditional risk measures through a significant correlation between ERM exposure, consequences and strategies, and most of the traditional measures of risk. Finally, we confirmed the relevance and the robustness of our results through a portfolio analysis approach. This research sheds new light on the relevance of ERM information by introducing a new framework and a new methodology for assessing the validity of this information within the banking sector, where risk management plays a vital role. The results are potentially useful for banks regulators as well as for producers and users of the information on banking risks.

Editorial: Governance, risks and rules between theoretical studies and empirical analyses

The first issue of the journal in 2020 (volume 10, issue 1) provides a careful analysis of the important field of research regarding the social indicators, the corporate governance system, risk analysis and risk management, disclosure and bank regulation. Specifically, the current issue pays attention of an index to measure the quality of the most important European cities, the evolution of Saudi Arabia corporate governance systems, the econometric approach to estimate the influence of interest rates and inflation rates on default rates of banks, the Canadian companies and risks firms disclose, the relevance of enterprise risk management (ERM) information disclosure in the US banking sector and the bank regulation of capital and risk management in the Europe and Central Asia region.

Requirements and guidelines for enterprise carbon emission management information disclosure

As the significant bridge of communication between the enterprise and stakeholder, the enterprise carbon emission management information disclosure has gained more and more attentions. This paper introduces the purposes and basic principles of the enterprise carbon emission management information disclosure, investigates the domestic and overseas carbon emission management information disclosure conditions, illustrates the main contents contained in the enterprise carbon emission management information disclosure, and demonstrates the measurement methods of enterprise carbon emission management information disclosure. Finally, this paper discusses the advantages and disadvantages of establishing the enterprise carbon emission management information disclosure market in China, the significance of implementing the enterprise carbon emission management information disclosure, and prospects the future of enterprise carbon emission management information disclosure.

An Assessment of Risk and Risk Management Information Disclosure of Companies Listed in Nasdaq OMX Baltic and Euronext Brussels

The main goal of this paper is to discuss theoretically and to evaluate empirically the differences of risk and risk management information disclosure (RRMID) among companies listed in Nasdaq OMX Baltic and Euronext Brussels and to determine factors influencing such differences. The authors use analysis and systemization of scientific literature, induction, content analysis and coding procedure for risk and risk management information disclosure assessment, as well as correlation and regression analyses. The results suggest that companies listed in Euronext Brussels disclose more risk and risk management (RRM) information; RRM related disclosures are more qualitative, focused on past or present events and have a neutral meaning in both markets. Companies also disclose more information about risks themselves than about risk management. Finally, only companies' size and presence of audit committee are significant factors influencing RRMID.

The management information disclosure through a website: empirical evidence by European municipalities

This study examines theoretically and empirically the determinants of e-disclosure. Following a comparative-international perspective, the research aims are: to construct an e-disclosure index, based on websites contents in order to measure municipalities' transparency concerning on management information, to analyse which factors potentially determine e-disclosure levels and to explain different degrees of municipal transparency. The analysis is carried out on a set of Italian and Spanish municipalities, chosen in a casual way, during 2013. The findings show that size and leverage are management information disclosure determinants both for Italy and for Spain, the geographical position is management information disclosure determinant only for Italy.

Risk management disclosure

Purpose– The purpose of this paper is to examine the effect of voluntary risk management disclosure (VRMD) on firm value (FV).Design/methodology/approach– This study uses content analysis approach to collect the VRMD data. FV is represented by three variables: market capitalization, Tobin’sQand market to book value of equity ratio. Based on a sample of 395 firms listed on the main market of Bursa Malaysia in 2011, this study uses multivariate statistical tests to examine the association between VRMD and FV.Findings– Based on the regression analysis, this study found that the VRMD has a positive and significant relationship with FV. Even though the authors hypothesize that damaging voluntary risk management disclosure (DVRMD) will have a negative and significant relationship with FV, the regression analysis shows that the DVRMD is not significantly related to FV. As expected, the relationship between beneficial voluntary risk management disclosure (BVRMD) and FV is positive and significant. The findings provide evidence that should be of interest especially to firms in terms of deciding upon whether to provide or avoid disclosing voluntary risk management information to their stakeholders.Research limitations/implications– Notwithstanding the critical empirical findings, this study is limited to only focusing on a one year data. The authors acknowledge the fact that findings from a one year data might not be easily generalized to other time periods. The authors believe a stronger argument could be obtained from evidence based on a longitudinal study or data that incorporate multiple economic conditions. The study highlights the fact that risks management information is important to investors in Malaysia when they make their investments decisions.Practical implications– To date, regulatory bodies emphasize more on financial risk management disclosure through the enforcement of MFRS 7; while non-financial risk information is less emphasized in current guidelines such as Malaysian Code on Corporate Governance (MCCG) (2012) and Recommended Practice Guide 5 (Revised), which only requires firms to disclose information about non-financial risk management without specific details. As this study has provided evidence on the significance of non-financial risk management disclosures in the capital market, this study could be useful for the regulatory bodies to develop more detailed guidelines on non-financial risk management disclosure in the future.Originality/value– Most of prior literatures are found to focus on the study of factors that influence the VRMD (such as Linsley and Shrives, 2006; Abraham and Cox, 2007; Hassanet al., 2009; Ismail and Abdul Rahman, 2011). Studies about the effects of voluntary risk management information disclosure is however very scant. Miihkinen (2013) studied the effects of risk management disclosure on information asymmetry. This paper adds to Miihkinen (2013) by investigating the relationship between VRMD and FV. This paper is expected to be the first to investigate on the empirical usefulness of VRMD in a developing country.

Análise das informações por segmento: divulgação de informações gerenciais pelas empresas brasileiras

The scenario of international accounting convergence leads Brazilian organizations to a new reality of informational challenge, the disclosure of management information, for example, the segmental information. The aim of this work is to verify how the management information are disclosure in the note published for segmental information in the companies listed in the IBrX-50. Findings demonstrate (i) the disclosure is different among sectors, (ii) there is a low level of management information disclosure. These variables may be an indicative of an attempt to hide the inefficiency of managers, or deletion of information as informational barrier for new competitors.

The families evaluation on management, care and disclosure for terminal stage cancer patients.

BackgroundQuality of life is an important concept which is subjective and personal; what is an acceptable quality of life to one may be 'worse than death' to another. The objective of this study was to develop and validate a questionnaire to assess relatives' perceptions and attitudes towards their terminal stage cancer patients' management (information disclosure, treatment choice, hospitalization and support-communication and care) including aspects regarding end-of-life and quality-of-life decisions.MethodsThe final study consisted of 146 relatives of advanced terminal stage cancer patients receiving palliation, attending a Pain Relief and Palliative Care Unit. The questionnaire incorporated 6 multi-item and 7 single-item scales, and was developed following a systematic review of measures appropriate for use in palliative care settings.ResultsFollowing analysis of the 25-item scale, the questionnaire has been validated as a shortened 21-item scale consisting of 5 multi-item and 5 single-item scales. Factor analysis was based upon information disclosure, hospitalization, and support-communication demonstrating Cronbach's alpha coefficients of 0.66, 0.5 and 0.70 respectively. Average item totals and inter-item scale correlations were between 0.62–0.70, with convergent validity correlations between 0.60–0.86. The questionnaire was well accepted by all subjects with an 8–10 minute completion time.ConclusionThe shortened 21-item self-assessment questionnaire may provide acceptable and valid assessment of caregiver(s)/Greek cancer patients' relatives perceptions on palliative care.

Concession bargaining and unions: Impacts and implications

The characteristics of concession bargaining relating to management behavior, information disclosure, intraunion activity, and union member attitudes are formulated and briefly described, followed by an exploration of the impact of the experience on and the implications for unions. The analysis suggests that union solidarity, union leader credibility, and union effectiveness have been negatively affected. Concession bargaining appears to lead to more difficulty in administering unions, a further decline in union image, an emphasis on adversarial relations with management, and the potential use of new tactics in collective bargaining.

Management Information Disclosure to Employees

Previous research aimed at assessing disclosure practice has made extensive use of postal questionnaire surveys which have been far from successful, achieving relatively low response rates and paying only scant attention to the complex network of information control which is prevalent both within and outside of modern organisations. However, this research has pointed out that the weighting given to information disclosed voluntarily by management for reasons of their own against information which is only provided on request, is of central importance, for it provides a measurement of management's commitment to communicate with employees and can be viewed as an acknowledgement of the rights of employees to corporate information and their representatives' function in defending those rights.