Voluntary Corporate Research Articles

Environmental Governance of China's Belt and Road Initiative

AbstractChina's Belt and Road Initiative (BRI), launched in 2013, is rapidly subsuming much of China's political and economic involvement abroad. As a far‐reaching infrastructure development and investment strategy, officially involving more than 130 countries, the expansion of the BRI raises important questions about its environmental impacts and its implications for environmental governance. This article examines how China is actively and rapidly developing an institutional architecture for its envisioned “green BRI,” considering the key actors, policies, and initiatives involved in the environmental governance of the BRI. We find that the current institutional architecture of the “green BRI” relies on voluntary corporate self‐governance and a multitude of international and transnational sustainability initiatives. The effectiveness of the environmental governance of the BRI not only hinges on China's priorities and commitments, but also on the political willingness and capacity of BRI partner countries to maintain, implement, and enforce stringent environmental laws and regulations. We conclude by outlining several environmental governance challenges and an agenda for future research.

Whither the Schemes of Arrangement in Malaysia with the arrival of the corporate rescue mechanisms?

The main features incorporated in the Schemes of Arrangement (SOA) in Malaysia under the Companies Act 2016 were designed over more than a century ago. For the first time, the company law framework has embraced corporate rescue laws with the introduction of two tailor-made corporate rescue mechanisms, Corporate Voluntary Arrangement and Judicial Management. This paper argues that the SOA, notwithstanding the presence of the corporate rescue mechanisms, may still be employed to achieve the objective of advancing corporate rescue for financially distressed private companies in Malaysia.

Effect of Company’s Age and Audit Firm Size on Voluntary Corporate Social Disclosure among Selected Listed Manufacturing Companies in Nigeria

Purpose of the article: In Nigeria, it is not compulsory for listed companies to report their corporate social responsibility in their financial report. However, some firms are reporting their social responsibility to their stakeholders, while some companies fail to do so. Some studies conducted on the influence of the company’s age and audit firm size on voluntary corporate disclosure showed inconsistent results and methodology differences indicate a research gap which this study tends to examine. Methodology/methods: This study used ex-post facto design. Out of thirty seven (37) consumer and industrial goods manufacturing companies listed in Nigeria as of December, 2018, only thirty (30) firms have their financial statements for the period 2008 to 2018 available either on their website or in the office of the Nigerian Stock Exchange. We applied the linear regression analysis with the aid of the SPSS 20.0 software for the panel data analysis. Scientific aim: This study investigates the effect of the company’s age and audit firm size on voluntary corporate social disclosure of the selected listed manufacturing firms in Nigeria. Findings: The company’s age does not have positive significant effect on voluntary corporate social disclosure. Contributions: The study shows that some young firms and older firms engaged in voluntary corporate social reporting, therefore regulatory authorities should make it compulsory for all listed firms on the Nigerian Stock Exchange to disclose their corporate social responsibility.

How Does Board Gender Diversity Influence the Likelihood of Becoming a UN Global Compact Signatory? The Mediating Effect of the CSR Committee

The aim of this study was to improve the understanding of the factors determining a firm’s affiliation with the United Nations Global Compact (UN GC) as the largest voluntary corporate responsibility initiative worldwide. Drawing on the board perspective of the firm, this paper examines the effect of gender diversity and the mediating effect of the existence of a corporate social responsibility (CSR) committee. To test the paper’s objectives, the authors use an international sample of analysis of 29,951 firm-year observations from 2012 to 2018. The results suggest that female directors on the board significantly encourage the firm’s affiliation with the UN GC and support the mediating effect of the existence of a CSR committee. Therefore, the positive impact of female directors on UN GC signatories appears to be mediated by the existence of a CSR committee.

Impact of Voluntary Disclosure on Valuation of Firms: Evidence from Indian Companies

This article investigates the effect of voluntary corporate disclosures on the firm value from the market value perspective. Financial reporting includes disclosures as prescribed by regulators, but few companies go beyond mandatory requirements and provide additional information voluntarily. This study empirically tests the extent of such voluntary disclosures using Corporate Voluntary Disclosure Index containing 81 items of both financial and non-financial information and panel data regression to test the hypotheses. The sample for this study is the non-financial companies in the BSE 100 Index and the period is five financial years from 2010–2011 to 2014–2015. This study finds a positive association between voluntary disclosures and firm value as measured by Tobin’s Q. Especially the market gives a higher valuation for companies disclosing optional information on social and environmental, corporate governance and financial information. This finding has a significant implication for emerging economies like India and it supports various disclosure theories such as agency, stakeholders and positive accounting theories.

Voluntary Disclosure and Informed Trading

I study the impact of informed trading on voluntary corporate disclosure in the presence of two frictions: cost of disclosure and value of managerial information. In the absence of both frictions, informed trading has no impact on disclosure even when traders are not certain whether the manager has information. If disclosure is costly, then informed trading reduces disclosure. Since traders can discover favorable information about the firm, additional disclosure of the information is not necessary. If managerial information is valuable for the firm, then informed trading increases disclosure. Since traders can discover unfavorable information about the firm, the manager with such information has less incentives to pool with uninformed managers and discloses to show that he is informed. I also show that informed trading can have both a positive and a negative real effect on the firm value by crowding in or crowding out information production in the firm. These results hold for general information structures and are robust if traders can choose how much information to acquire.

Directors' Informational Role in Corporate Voluntary Disclosure: An Analysis of Directors from Related Industries

ABSTRACTBoards of directors play their role in corporate governance by advising and/or monitoring managers. In the corporate disclosure literature, prior research has documented directors' monitoring role, yet empirical evidence on directors' advising role is limited. Since the advising role often entails information transfer, we examine directors who concurrently serve as directors or executives in the firms' related industries (DRIs) and hence possess valuable information about the firms' external operating environment. We hypothesize and find that more DRIs on boards are associated with more accurate management forecasts. This association is stronger when firms face greater uncertainty, and holds in settings where DRIs are unlikely to monitor managers, suggesting a distinct advising role of DRIs. Our study highlights directors' role as information suppliers and advisors who help shape corporate voluntary disclosure.

Can self-regulation work in environments of high corruption?

PurposeThe purpose of this paper is to investigate if market discipline and legal environment are sufficient to motivate firms to disclose optimal level of corporate information voluntarily in the context of a developing country that is Pakistan. Furthermore, it was examined if regulators have sufficient regulatory capacity to influence the extent up to which politically connected companies disclose corporate information.Design/methodology/approachAn in-depth investigation was carried out through qualitative content analysis of 200 annual reports from 40 companies listed on Karachi Stock Exchange along with 26 semi-structured interviews from experts in the field of corporate governance.FindingsFindings from the research indicated that there is an absence of culture for disclosure of information and country’s existing institutional environment is not sufficiently strong to support self-regulation or voluntary disclosure of information. It is argued that stringent disclosure regulation results in better flow of information in politically connected companies and helps in curbing opportunistic behaviour.Practical implicationsThis research carries significant policy implications. It is proposed that in addition to mandatory disclosure requirements, the code of corporate governance should indicate desirable disclosure levels for voluntary corporate information as well.Originality/valueThis is the first study to examine the effectiveness of role and usefulness of mandatory corporate disclosure regulation, voluntary disclosure practices, and capacity of regulators to enhance dissemination of corporate information in a developing country with high levels of political corruption and cronyism through an in-depth research.

Do corporate press releases drive media coverage?

We examine the role of voluntary corporate press releases about firms' financial performance as a stimulus for financial media coverage. We find that there is a spike of media articles on the same day and one trading day following firms' press releases. We provide evidence that managers compete for media attention and can use voluntary press releases to increase their firms' media coverage; a firm's issuance of press releases attracts more media articles about the firm leading to greater abnormal returns and trading volumes. Our results are robust to controlling for firm characteristics, different model specifications as well as regular earnings announcements, which have been the focus of prior literature. We also show that our inferences are not sensitive to managers' duty to disclose material information to investors. Collectively, our findings suggest that media coverage decisions can be influenced by a firm.

Voluntary disclosures on control system over financial reporting and corporate governance mechanisms: Evidence from Poland

The paper presents the results of research on the mechanisms of corporate governance functioning on the Polish capital market. The purpose of this article is to identify the impact of selected internal mechanisms of corporate governance on the scope of disclosures on the control system over financial reporting. Disclosures were presented by public companies operating on the capital market with an insider model of corporate governance. The research covered 301 companies listed on the Warsaw Stock Exchange and their voluntary disclosures published in 2013. The results indicate that the scope of disclosures on the control system over financial reporting is positively correlated with the presence of audit committee and the share of independent supervisory board members in their total number. The obtained research results confirm the belief presented in the literature that in an insider model of corporate governance internal mechanisms affect the scope of voluntary corporate disclosures. In addition, research results indicate that the scope of voluntary disclosures depends on the size of the company.

Italy Towards Mandatory Sustainability Reporting. Voluntary Corporate Social Responsibility Disclosure of Italian Companies and Legislative Decree 254/2016 Statements. A Quantitative Analysis of the Last 10 Years

Italy Towards Mandatory Sustainability Reporting. Voluntary Corporate Social Responsibility Disclosure of Italian Companies and Legislative Decree 254/2016 Statements. A Quantitative Analysis of the Last 10 Years

The Spillover of Shareholder Litigation Risk and Corporate Voluntary Disclosure

The Spillover of Shareholder Litigation Risk and Corporate Voluntary Disclosure

Corporate Governance And Voluntary Disclosure Level; Evidence From Manufacturing Companies In Sri Lanka

Corporate Governance And Voluntary Disclosure Level; Evidence From Manufacturing Companies In Sri Lanka

Voluntary CSR disclosure, institutional environment, and independent audit demand

Using a sample of A-share listed companies on the Shanghai and Shenzhen Stock Exchanges, this study examines the impact of voluntary corporate social responsibility (CSR) disclosure on independent audit demand in different institutional environments. The sample covers the 2008–2016 period and excludes firms that are required to disclose CSR information. The findings show that compared with companies that choose to not disclose such information, companies that voluntarily disclose CSR information prefer to employ “small” accounting firms for auditing services, although the auditing fees are much higher. However, as the institutional environment improves, this preference is weakened. Further analyses show that this preference is stronger in enterprises where CSR disclosure is driven by strong political motivations and managerial self-interest motivations. Legitimate motivations and economic motivations do not significantly impact the preference for “small” audit firms. Furthermore, this preference is more obvious in enterprises with poor operational performance and low information disclosure quality, and it increases as CSR disclosure level decreases. The study enriches our understanding of the economic consequences of voluntary CSR disclosure and the factors that influence independent audit demand. The results also have implications for the construction and regulation of China’s system for supervising CSR information disclosure in the transitional phase.

Pengaruh Pengungkapan Tata Kelola Perusahaan terhadap Akurasi Harga Saham pada Perusahaan yang Terdaftar di Bursa Efek Indonesia Tahun 2013-2017

This study was conducted to analyze the effect of corporate governance disclosure to Share Price Accuracy. The variables of corporate governance disclosure in this study are divided into two namely Mandatory Corporate Governance Disclosure and Voluntary Corporate Governance Disclosure.
 The data obtained in this research is secondary data. The Secondary data used are financial statement data and company annual report data. Secondary data can be downloaded from Indonesian stock exchanges official website via www.idx.co.id. The number of companies used as research samples are 393 companies. The study period began from 2013 to 2017. The data obtained were as many as 1965 data. 
 The conclusion of this study prove that both of the independent variables have a significant effect to Share Price Accuracy.Mandatory Corporate Governance Disclosure has a significant positive effect to the Share Price Accuracy partially.Voluntary Corporate Governance disclosure also has significant effect to the Share Price Accuracy partially.

Critical Analysis of the International Standards on Corporate Governance and Its Compliance

Critical Analysis of the International Standards on Corporate Governance and Its Compliance

Corporate social disclosure through social media: an exploratory study

PurposeThe purpose of this paper is to determine the extent of voluntary corporate social responsibility (CSR) disclosure by Indonesian firms on their social media and to compare it with the mandatory disclosure on their annual reports.Design/methodology/approachThe authors use publicly listed Indonesian firms that are included in the SRI-KEHATI Index as the sample. Further, by using NVIVO software, the authors qualitatively analyze CSR activities disclosed on firms’ social media and annual reports with an interpretive approach.FindingsThe findings indicate that Indonesian firms still exhibit early stages of social media-based voluntary CSR disclosure. Further, issues on training, education and skill building dominate firms’ disclosure. Finally, Indonesian firms disclose less CSR information in their social media than in their annual reports, thus confirming the early stages of social media-based CSR disclosure.Research limitations/implicationsThe small sample size limits the generalizability of the results.Practical implicationsThis paper provides insights on which CSR issues are commonly disclosed in firms’ social media. This study may also inform regulators the extent of disclosures that could be regulated in social media.Originality/valueSocial media-based CSR disclosure in developing countries is relatively understudied. Thus, this paper empirically shows the topic and intensity of CSR disclosure in social media and the comparison between this type of CSR disclosure with CSR disclosure using other media.

THE EFFECT OF POLITICAL CONNECTION OF CSR DISCLOSURE WITH PROFITABILITY AS MODERATING VARIABLE

The purpose of the study is to examine the effect of political connection to the level of voluntary corporate social responsibility disclosure with profitability as a moderating variable. Political connection in this research using 2 proxies that are the government share ownership and the board of directors. The sample of this study was 110 state-owned companies listed on the Indonesia Stock Exchange (IDX) for the period 2012-2017. The sampling method uses purposive sampling technique. The analytical tool used is simple linear regression analysis and analysis of Moderated Regression Analysis (MRA). The results of the study found that political connection of the government ownership and board director doesn’t show any significant effect toward CSR disclosure. Profitabilias, as a moderating variable, doesn’t moderate the influence of political connection using both proxies toward corporate social responsibility disclosure. The study makes a significant contribution to the literature by examine the influence political connection and CSR using neo-pluralist perspective of legitimacy theory. The implication of this research was suggested to increase the sector and more detail proxy of the research variable.

The Spillover of Shareholder Litigation Risk and Corporate Voluntary Disclosure

We study how the spillover of peer firms’ litigation risk affects a focal firm’s voluntary disclosure. We find that focal firms facing greater litigation risk spillovers reduce disclosure activities by lowering both the likelihood of issuance and the frequency of management earnings forecasts. We show that the effect is likely causal using a difference-in-differences design where an unanticipated court ruling significantly reduces certain firms’ exposure to peers’ litigation risk spillover. Further analyses suggest that cross-ownership of institutional investors is a potential mechanism through which the diffusion of litigation risk externalities occurs.

Executive compensation in less regulated markets: the impact of debt monitoring

This paper shows that in the lightly regulated Alternative Investment Market (AIM) voluntary corporate board structures might not reduce agency costs between shareholder and executive directors. In this less regulated market, we find that the extent of debt affects executive pay. In addition, the theoretical determinants of executive pay affect CEO and other executives’ pay and incentives differently in this market. We find no evidence that debt levels affect CEO pay in a matched sample of Main Market firms. Our results suggest that debtholders could be better monitors of executive directors’ actions, in comparison to voluntary governance committees in less regulated markets.