Disclosure Policy Research Articles

Boardroom Diversity and Whistleblowing Disclosure: Empirical Evidence from Malaysia’s Top 100 Publicly Listed Companies

The disclosure of whistleblowing policies is a critical component of effective corporate governance. High standards of whistleblowing policy disclosure signal a company’s commitment to safeguarding stakeholder interests. This research aims to analyze the relationship between board composition and whistleblowing policy disclosure in the top 100 Malaysian publicly listed companies. Specifically, the study investigates whether board independence, board size, the frequency of board meetings, and board gender diversity affect the level of whistleblowing policy disclosure. The relationships between these board characteristics and whistleblowing policy disclosure are analyzed using an Ordinary Least Squares (OLS) regression model. The findings reveal that board independence and gender diversity are significantly and positively associated with whistleblowing policy disclosure. However, board size and frequency of the board meetings do not exhibit significant relationships with whistleblowing policy disclosure. This study has contributed to the existing literature by extending the principal-principal conflict theory to the context of whistleblowing policy disclosure, offering new insights into the governance mechanisms that drive transparency in corporate reporting.

Punishment or reward? Environmental information disclosure in Chinese listed companies based on evolutionary game systems

AbstractIn February 2022, the Chinese government implemented a mandatory environmental information disclosure policy for publicly traded corporations. To assess the factors influencing environmental information disclosure, we developed a tripartite evolutionary game system model based on strategic interactions between the government, enterprises and the public. Afterwards, we conducted a simulation to examine the systemic interaction equilibrium among the parties involved. Additionally, we assessed critical factor changes in decision‐making for three stakeholders: initial strategy selection, related policy subsidies, regulatory penalties and public incentives. Incorporating Gaussian white noise into the evolutionary game model enhances the realism of simulations, allowing for a more accurate representation of how random disturbances affect decision‐making among the government, the public and enterprises. The study reveals that the active participation of the public in information disclosure activities has a certain degree of substitution effect on the government's choice to regulate high‐quality information disclosure by enterprises actively. The penalty mechanism is more effective than the subsidy mechanism. The public's decision‐making process is susceptible to the direct economic benefits that enterprises can gain from disclosing low‐quality environmental information.

The legality and appropriateness of keeping Korean Medical Licensing Examination items confidential: a comparative analysis and review of court rulings.

This study examines the legality and appropriateness of keeping the multiple-choice question items of the Korean Medical Licensing Examination (KMLE) confidential. Through an analysis of cases from the United States, Canada, and Australia, where medical licensing exams are conducted using item banks and computer-based testing, we found that exam items are kept confidential to ensure fairness and prevent cheating. In Korea, the Korea Health Personnel Licensing Examination Institute (KHPLEI) has been disclosing KMLE questions despite concerns over exam integrity. Korean courts have consistently ruled that multiple-choice question items prepared by public institutions are non-public information under Article 9(1)(v) of the Korea Official Information Disclosure Act (KOIDA), which exempts disclosure if it significantly hinders the fairness of exams or research and development. The Constitutional Court of Korea has upheld this provision. Given the time and cost involved in developing high-quality items and the need to accurately assess examinees' abilities, there are compelling reasons to keep KMLE items confidential. As a public institution responsible for selecting qualified medical practitioners, KHPLEI should establish its disclosure policy based on a balanced assessment of public interest, without influence from specific groups. We conclude that KMLE questions qualify as non-public information under KOIDA, and KHPLEI may choose to maintain their confidentiality to ensure exam fairness and efficiency.

Environmental and Social Disclosure of Brazilian Banking Financial Institutions from the Perspective of the Sustainable Development Goals

Objective: The objective of this study is to investigate the determining factors that influence the disclosure of environmental and social information by the Brazilian banking sector from the perspective of the Sustainable Development Goals (SDGs), with the aim of identifying which organizational characteristics impact the level of socio-environmental disclosure. Theoretical Framework: In this topic, the main concepts and theories that underpin the research are presented. The study is based on the Theory of Legitimacy, which provides theoretical elements for socio-environmental disclosure. This theory explains management’s motivation to disclose environmental information, recognizing that organizational survival depends not only on financial success but also on the ability to maintain a social contract with society. Method: The methodology adopted for this research comprises a quantitative approach based on content analysis of sustainability reports from Brazilian banks. Data collection was carried out through the analysis of corporate disclosure reports published between 2016 and 2020. The regression model with panel data was used to analyze the influence of organizational characteristics on the dissemination of socio-environmental information from the perspective of the SDGs. Results and Discussion: The results obtained revealed that the size of the company and public control are factors that influence the disclosure of socio-environmental information regarding the SDGs. Whether or not the company owns shares on the Stock Exchange and its profitability have little impact on the amount of information disclosed about the SDGs. In the discussion section, these results are contextualized based on the theoretical framework, highlighting the implications and relationships identified. Possible discrepancies and limitations of the study are also considered in this section. Research Implications: The practical and theoretical implications of this research are discussed, providing insights into how the results can be applied or influence practices in the field of socio-environmental disclosure. These implications could encompass the banking sector, regulatory bodies, and policymakers. Originality/Value: This study contributes to the literature by deepening the knowledge about environmental disclosure in the banking sector, a topic still little explored in academic studies. The relevance and value of this research are evidenced by its potential to inform better practices and policies for socio-environmental disclosure in the banking industry.

Ridge distributions and information design in simultaneous all-pay auction contests

Two privately informed contestants compete in a contest, and the organizer ex-ante designs a public anonymous disclosure policy to maximize the contestants' total effort. We fully characterize ridge distributions, under which the organizer achieves the first-best outcome in equilibrium: the allocation is efficient, and the entire surplus goes to the organizer. When the prior is a mixture of a ridge distribution and a perfectly correlated distribution, the first-best outcome is achievable by a signal that solely generates ridge distributions as posteriors.

Disclosure and Dynamic Risk Sharing with a Large Shareholder

ABSTRACT We study the effects of disclosure in a dynamic market with imperfect competition. The supply of an asset is determined by a large shareholder with price impact, who trades slowly to diversify away from concentrated ownership. Small investors provide capital and thus risk-bearing capacity to the market. Although it is well known that disclosure impedes risk sharing by shifting risk before future trading opportunities, we show that disclosure, at the same time, can enhance risk sharing by promoting more trades. Resolving this tradeoff, an interior level of disclosure quality maximizes the small investors’ surplus as well as the total surplus, but minimizes the large shareholder’s surplus. Further, efficient disclosure policies feature increasing quality over time. JEL Classifications: D80; E21; G12; L13; M41.

Modeling Organizations’ Responses to Employee Disclosure at Work: An Organizational Economics Approach

Employee disclosure refers to the process of revealing personal information about oneself with others in a workplace setting. This type of disclosure also greatly influences organizational culture, policies, and workplace interactions. Modeling such disclosure scenarios using an organizational economics approach addresses communication challenges faced by businesses dealing with the respective disclosure(s). Further, it allows for uncovering the most effective ways to communicate disclosure procedures and policies to employees and employers. This, in turn, will lead to (a) improved corporate training practices for employee disclosure in business communication settings and (b) increased overall productivity measures for organizational members.

Illegally beautiful? The role of trust and persuasion knowledge in online image manipulation disclosure effects

The accessibility of powerful photo editing tools has caused image retouching and manipulation to become widespread among sponsored social media content. Images in sponsored posts featuring influencers are often edited to reflect unrealistic body proportions, potentially harming consumers if they compare themselves to unattainable beauty standards. In response to this trend, regulators in different countries have moved to consider or adopt disclosure policies; however, disclosure practices and their effects have not been extensively studied. An online experimental study (N = 480) identified that low- and high-detail disclosures of image manipulation lowered consumer trust. Decreased trust led consumers to use their persuasion knowledge, resulting in less favorable attitudes toward both the brand and influencer, reduced interest in seeking more information about the brand, and diminished body comparison. Finally, implications for various stakeholders, including content creators, brands, and policy-makers, are discussed.

Major Customers and the Speed of Leverage Adjustments

Purpose: This study investigates how major customers influence the speed of adjustment (SOA) in a firm's capital structure, specifically examining the effects of governmental versus non-governmental major customers.Study design/methodology/approach: The study employs Blundell and Bond’s (1998) GMM model to estimate SOA. Robustness methods include fixed effects, two-stage least squares (2SLS), propensity score matching (PSM), and the augmented doubly censored Tobit (DPF estimator).Sample and data: The sample consists of 186,240 firm-year observations from Compustat North America annual files and Compustat historical segment files, spanning 1978 to 2013. Firms in the utility and financial sectors are excluded.Results: Findings indicate that major customers significantly influence SOA by reducing market uncertainty through certifications. Firms with major customers have a higher SOA, with governmental customers exhibiting an even higher SOA than non-governmental ones. Results are consistent across various models and settings.Originality/value: This study uniquely identifies major customers as critical determinants of SOA, highlighting the heterogeneities in firms' SOA. It stresses the importance of considering customer type in financial strategies, differentiating between governmental and non-governmental impacts. These findings offer valuable insights for scholars, policymakers, and practitioners.Research limitations/implications: Focusing on publicly listed U.S. firms limits generalization. Future research should extend the analysis to other regions and recent periods. The findings provide insights for supplier firms in strategizing financial decisions and managing relationships with major customers. We emphasize the significant role of major customers in financial strategies, advocating for more detailed disclosure policies in the U.S. and globally to enhance transparency and market efficiency.

Mandatory environmental disclosure policy in the largest carbon emission country

Purpose This paper aims to examine the impact of corporate environmental transparency (CET) on corporate financial performance under a mandatory environmental disclosure policy in China, the largest carbon-emitting country. It aims to clarify the concept of CET and investigate its short-term financial implications for key pollutant-discharging entities (KPEs). Design/methodology/approach A multidimensional model is used to construct a comprehensive CET index for KPEs in China. Empirical tests are conducted to assess the relationship between CET and corporate financial performance. Findings The study finds a negative relationship between CET and corporate financial performance in the short term. Increased environmental transparency necessitates higher environmental resource allocation, adversely affecting profits. The results remain unchanged from a battery of robustness tests. Despite mandatory disclosure, companies tend to provide general and vague information rather than specific and meaningful environmental data. Research limitations/implications The findings provide rich practical implications for policymakers to improve a mandatory environmental disclosure policy. The paper also contributes to the existing knowledge by developing a measure of CET and presenting new evidence to the debate on whether corporate environmental disclosure can be regarded as transparency. Practical implications Policymakers are advised to refine mandatory environmental disclosure regulations to ensure genuine transparency and to implement policy measures that alleviate the financial burdens of companies with high CET levels, thereby encouraging sustainable practices. Originality/value This paper contributes to the existing knowledge by developing a measure of CET and providing new evidence on the debate over whether environmental, social and governance (ESG) disclosure equates to transparency. It emphasizes the complexity of transparency and the inadequacy of current environmental disclosure practices among KPEs. The study underscores the need for financial support for companies with high CET levels to alleviate short-term financial strains and promote long-term sustainability.

Disclosure policies in all-pay auctions with affiliated values

We consider all-pay auctions with private and affiliated binary values. The organizer commits ex ante to fully disclosing or concealing bidders’ valuations. We examine the effects of full disclosure on bidders’ welfare and the organizer’s revenue (i.e., expected aggregate bid). We find that full disclosure, as opposed to full concealment, always yields a higher welfare for bidders. On the other hand, full concealment yields a higher revenue if the affiliation in bidders’ valuations is low or if there are only two bidders. Conversely, if the affiliation is high and there are sufficiently many bidders, full disclosure tends to increase revenue.

Disclosing and cooling-off: An analysis of insider trading rules

We analyze two insider-trading regulations recently introduced by the Securities and Exchange Commission: mandatory disclosure and “cooling-off period”. The former requires insiders disclose trading plans at adoption, while the latter mandates a delay period before trading. These policies affect investors’ trading profits, risk sharing, and hence their welfare. If the insider has sufficiently large hedging needs, in contrast to the conventional wisdom from “sunshine trading”, disclosure reduces the welfare of all investors. In our calibration, a longer cooling-off period benefits speculators, and its implications for the insider and hedgers depend on whether the disclosure policy is already in place.

Peer Effects of Corporate Disclosures: Evidence From the Registration-Based IPO System in China

China launched the registration-based IPO system in 2019 whereby all firms listed on the newly established STAR board (“peer firms”) are required to disclose specific innovation and industry-related information in their prospectus. Using this event as a quasi-experiment, our study investigates the causal effects of peer firms’ disclosures on individual firms’ disclosure strategy. We find that the precision of individual firms’ management earnings forecast (MEF), both its form and width, significantly decreases when peer firms disclose more information during the IPO period. In cross-sectional analyses, we find this effect to be more pronounced for individual firms that are likely to experience greater competitive pressure from industry peer firms and firms with higher risks and performance uncertainty that make them more cautious to external competitive pressure. This result suggests that peer firms’ disclosures induce greater competitive pressure and uncertainty about future firm performance, triggering managers of individual firms to adopt a more cautious disclosure strategy. Overall, our study extends the literature on the peer effects in corporate disclosure decisions and documents potential unintended consequences of mandatory disclosure policies.

Attitudes towards disclosure of familial genetic risk in a Mediterranean island population – A survey of the Maltese population

Germline genetic testing has implications that extend beyond the individual patient to relatives, particularly for high-penetrance variants implicated in hereditary cancer or neurodegenerative syndromes. Many countries encourage patient-led communication to inform at-risk relatives, although the efficacy and uptake of this approach varies. Alternative scenarios envisage direct contact mediated by clinicians. The familial disclosure of sensitive genetic information is also determined by complex socio-ethnic factors. To date, no study has explored whether relatives would want to be informed of familial genetic risk and their preferences on different methods of communication in Malta. We thus used a published instrument that utilizes hypothetical scenario methodology to survey the attitudes of the Maltese population (n = 334) to receiving genetic information from family members. Two vignettes on Huntington's disease and colorectal cancer were presented. We also explored preferences towards the communication of genetic risk, confidentiality, and disclosure policies. Our preliminary results show that most respondents want to be informed of their increased risk by a family member or a clinician and would opt to receive confirmatory genetic testing. Most respondents preferred being informed of genetic risk by a close relative, but in the case of non-disclosure would want to be informed by a clinician. Most respondents expressed preference in favour of the introduction of registries, legislative change and sharing of contact details to address cases of nondisclosure. Our findings contribute further to evidence that supports, in selected hypothetical scenarios, an envisioned change in disclosure of genetic data policy by the public that is different from current practice to date.

Development of an Algorithm for Assessing the Scope of Large Forest Fire Using VIIRS-Based Data and Machine Learning

Forest fires pose a multifaceted threat, encompassing human lives and property loss, forest resource destruction, and toxic gas release. This crucial disaster’s global occurrence and impact have risen in recent years, primarily driven by climate change. Hence, the scope and frequency of forest fires must be collected to establish disaster prevention policies and conduct relevant research projects. However, some countries do not share details, including the location of forest fires, which can make research problematic when it is necessary to know the exact location or shape of a forest fire. This non-disclosure warrants remote surveys of forest fire sites using satellites, which sidestep national information disclosure policies. Meanwhile, original data from satellites have a great advantage in terms of data acquisition in that they are independent of national information disclosure policies, making them the most effective method that can be used for environmental monitoring and disaster monitoring. The Visible Infrared Imaging Radiometer Suite (VIIRS) aboard the Suomi National Polar-Orbiting Partnership (NPP) satellite has worldwide coverage at a daily temporal resolution and spatial resolution of 375 m. It is widely used for detecting hotspots worldwide, enabling the recognition of forest fires and affected areas. However, information collection on affected regions and durations based on raw data necessitates identifying and filtering hotspots caused by industrial activities. Therefore, this study used VIIRS hotspot data collected over long periods and the Spatio-Temporal Density-Based Spatial Clustering of Applications with Noise (ST-DBSCAN) algorithm to develop ST-MASK, which masks said hotspots. By targeting the concentrated and fixed nature of these hotspots, ST-MASK is developed and used to distinguish forest fires from other hotspots, even in mountainous areas, and through an outlier detection algorithm, it generates identified forest fire areas, which will ultimately allow for the creation of a global forest fire watch system.

Milestone of corporate internet reporting around the word

This research aims to provide a foundation and overview of research in the field of CIR. This research provides a literature review of CIR research, especially the development and state of the art of CIR research over the past four decades. This research method uses systematic analysis based on bibliometric analysis. This research examines databases in Proquest and selected manuals of the last four decades. The results show that there is still an interesting debate regarding the determinants of CIR disclosure in each country. In addition, it illustrates how researchers in each country conducted the last four decades of CIR research. Therefore, the results of this study provide guidance and a literature review on future research—especially the impact of regulations and standards in each in the voluntary disclosure of CIR. In addition, corporate reporting regulators in each country can review the CIR disclosure policy, which is still voluntary. There has been no research that has created the state of the art of corporate internet reporting.

Reputation-based persuasion platforms

In this paper, we introduce a two-stage Bayesian persuasion model in which a third-party platform controls the information available to the sender about users' preferences. We aim to characterize the optimal information disclosure policy of the platform, which maximizes average user utility, under the assumption that the sender also follows its own optimal policy. We show that this problem can be reduced to a model of market segmentation, in which probabilities are mapped into valuations. We then introduce a repeated variation of the persuasion platform problem in which myopic users arrive sequentially. In this setting, the platform controls the sender's information about users and maintains a reputation for the sender, punishing it if it fails to act truthfully on a certain subset of signals. We provide a characterization of the optimal platform policy in the reputation-based setting, which is then used to simplify the optimization problem of the platform.

Research integrity in Instructions for Authors in Japanese medical journals using ICMJE Recommendations: A descriptive literature study.

The International Committee of Medical Journal Editors (ICMJE) has published Recommendations for the Conduct, Reporting, Editing, and Publication of Scholarly Work in Medical Journals. These provide a global standard for writing and editing medical articles, including research integrity. However, no study has examined the research integrity-related content of Japanese medical journals' Instructions for Authors. We therefore compared research integrity content in ICMJE member journals with those in the English- and Japanese-language journals of the Japanese Association of Medical Sciences (JAMS). This was a descriptive literature study. We obtained Instructions for Authors from English- and Japanese-language journals listed on the JAMS website and the ICMJE member journals listed on the ICMJE website as of September 1, 2021. We compared the presence of 20 topics (19 in the ICMJE Recommendations plus compliance with ICMJE) in the Instructions for Authors, and analyzed the content of the conflict of interest disclosure. We evaluated 12 ICMJE member journals, and 82 English-language and 99 Japanese-language subcommittee journals. The median number of topics covered was 10.5 for ICMJE member journals, 10 for English-language journals, and three for Japanese-language journals. Compliance with ICMJE was mentioned by 10 (83%) ICMJE member journals, 75 (91%) English-language journals, and 29 (29%) Japanese-language journals. The ICMJE Conflicts of Interest Disclosure Form was requested by seven (64%) ICMJE member journals, 15 (18%) English-language journals, and one (1%) Japanese-language journal. Although the topics in the JAMS English-language journals resembled those in the ICMJE member journals, the median value of ICMJE-related topic inclusion was approximately one-third lower in JAMS Japanese-language journals than in ICMJE member journals. It is hoped that Japanese-language journals whose conflict of interest disclosure policies differ from ICMJE standards will adopt international standards to deter misconduct and ensure publication quality.

Shaming, stringency, and shirking: Evidence from food‐safety inspections

AbstractThis paper examines the responses of chicken producers to public disclosure of quality information (or categorization) regarding Salmonella in chicken carcasses. Producers exert effort to attain better categorization and shirk when failing to meet the thresholds required for better categorization. Public disclosure reduces this shirking effect. However, some producers shirk even under public disclosure when the threshold for disclosure is too stringent. The results suggest that the most effective quality disclosure policies would either disclose continuous (noncategorical) information or impose fines or other sanctions on producers attaining the poorest quality.

Optimal governance radius of environmental information disclosure policy: Evidence from China

s: Urban pollution governance requires the joint participation of government, society, and enterprises, with the environmental information disclosure policy serving as a novel tool to promote multi-stakeholder engagement. This study aims to delve into the impact of the environmental information disclosure policy on regional environmental quality by using data from Chinese cities. Through analysis, the study gets the following conclusions. Firstly, the environmental information disclosure policy not only effectively reduces urban environmental pollution but also exhibits an apparent spatial spillover effect. The impact of this policy on air pollution in neighboring cities shows an inverted U-shaped pattern of first rising and then falling, with the optimal radius of this external effect estimated at 250km. Secondly, the results of the mechanism test indicate that government regulatory efforts and clean industry alternatives are essential channels for curbing urban environmental pollution. Lastly, the heterogeneity test shows that the inhibitory effect of the environmental information disclosure policy on environmental pollution is more pronounced in civilized cities, cities in the “two control zones”, sulfur dioxide control zones, and cities with high Pollution Information Transparency Index scores.