Voluntary Disclosure Research Articles

Firm ownership structure and voluntary carbon disclosure: a systematic review and meta-analysis

Purpose This study aims to systematically consolidate and quantitatively integrate the mixed empirical results on the association between ownership mechanisms and voluntary carbon disclosure using meta-analysis and further propose potential country-level moderators of this relationship. Design/methodology/approach The authors apply meta-analytic procedures on 55 empirical studies conducted during 2008–2022, covering 13 countries, 85 effect sizes and 226,473 firm-year observations. To gauge the significance of the estimated mean effect size, a random-effects Hedges and Olkin meta-analysis procedure is adopted, followed by a restricted maximum likelihood based meta-regression, to test the effect of possible moderators. Findings Aligned with agency and stakeholder theories, the results highlight institutional and state ownership (SO) as having a significant positive impact on voluntary carbon disclosure. On the other hand, ownership concentration, managerial and foreign ownership have an insignificant effect on voluntary carbon disclosure. Based on institutional theory perspectives, the authors confirm the impact of institutional ownership on voluntary carbon disclosure to be more prominent in civil law countries and those countries that have implemented an emission trading scheme (ETS). Practical implications The finding that institutional and SO in firms can translate into higher voluntary disclosures deems investors and the government as crucial stakeholders in achieving carbon neutrality. Furthermore, the finding that the effect of institutional investors on carbon disclosure is heightened in ETS-implemented countries provides evidence to the regulatory authorities in favour of this scheme. Social implications The positive impact of institutional and government ownership on voluntary carbon disclosure highlights that these ownership structures not only have the potential to transform corporate decisions but also have implications for the wider society. As firms owned by institutional investors disclose their carbon information, it provides access to critical information about their environmental practices to the public. This fosters an environment of transparency and trust between the firm and its stakeholders (the community), leading to an overall well-informed society. Originality/value While prior meta-reviews studied the impact of corporate governance on voluntary disclosures, the meta-literature, as of 2024, has yet to address its influence specifically on carbon disclosures, which are pertinent amidst the ongoing global climate change crisis. The findings inform policymakers about the pivotal institutional factors that can amplify the impact of effective ownership structures on voluntary carbon disclosure. Future scope exists for investigating the effects of ownership mechanisms on firm-level sustainable investments. Furthermore, future empirical analysis could consider the moderating influence of “culture” and “ease of doing business” on the ownership-carbon disclosure relationship.

Board gender diversity and voluntary disclosure: moderation of family ownership in India

Purpose Given the dominance of family ownership in India, this paper aims to examine whether the impact of board gender diversity (BGD) on voluntary disclosure (VD) is moderated by family ownership. Design/methodology/approach Based on a panel data set of the top 100 listed Indian firms for five years, this study examines the impact of BGD on VD by segregating the sample between family-owned and nonfamily firms. For empirical analysis, we use appropriate panel data models. For robustness, we employ a three-stage least square (3SLS) model. Findings The findings reveal the significant positive impact of BGD in terms of its different measures on VD for family and nonfamily firms. However, the impact becomes insignificant for nonfamily-owned firms when female directors are not substantially represented on the board. Originality/value This study extends the ongoing debate about the outcomes of the mandatory gender quota on board by providing novel evidence on the difference between the impact of BGD on VD for family and nonfamily firms in the Indian context.

Tax Loss Carryforward Disclosure

AbstractThis study examines firms’ voluntary disclosure of tax loss carryforward (TLCF) information. We measure the content and presentation of TLCF information by a disclosure score based on hand collected data from annual reports. Our identification strategy employs new proprietary data to control for overall reporting quality. We argue and find that uncertainty about the usability of TLCF is a key driver of voluntary TLCF disclosure. The disclosure score is on average 3.86 points higher for firms with a strong loss history vis-à-vis firms without such a loss history. This positive association is economically meaningful, since the sample mean for the disclosure score is 8.88 (median 7.5). We also find that the content and type of disclosure vary systematically with the signal of uncertainty. In instances of historic uncertainty, firms exhibit increased reporting on the reasons and mechanisms behind changes in TLCF. Conversely, in the case of future uncertainty, they increase disclosure related to valuation allowance information. Our study provides detailed and unique insights into TLCF disclosure, suggesting that managers enrich the information environment with voluntary disclosure that caters to expected investors’ needs.

Sustainability Disclosures and Their Influence on Cost of Capital: A Comprehensive Bibliometric Study

Since the beginning of the twenty-first century, corporate social responsibility (CSR) has emerged as a global phenomenon in the business sector, capturing the attention of all stakeholders. Both early-stage and established firms often engage in high levels of voluntary disclosure, thereby reducing their cost of capital. This study synthesizes existing literature related to the impact of CSR on the cost of capital, focusing on sustainability and environmental disclosure. Utilizing the Scopus database, we conducted a bibliometric analysis through VOSviewer, analyzing 76 research articles from reputable academic journals published between 2002 and 2022. Our analysis identified three primary clusters: (1) the red cluster, titled "CSR and ESG disclosure and its impact on cost of capital" with 43 articles examining corporate social performance strategies, environmental risks, and green support; (2) the green cluster, titled "CSR activities and environmental or voluntary disclosure" with 21 articles focusing on corporate social investment, greenhouse gas emissions, voluntary disclosure, and their impact on cost of capital; and (3) the blue cluster, titled "sustainability disclosure or toxic release" with 12 articles centered on corporate social decoupling and toxic release. Our findings provide valuable insights for enhancing a firm's environmental and economic performance and offer guidance for decision-makers, lenders, investors, shareholders, and policymakers on reducing a firm's cost of capital through sustainability policies and strategies. Additionally, we highlight unexplored dimensions for future research, including forecasting firm investments using decoupling techniques, exploring the mediating role of CSR on the cost of capital, and examining the relationship between carbon intensity, greenhouse gases, and toxic release.

Governance Components and Sustainability from the Perspective of Voluntary and Mandatory Disclosure

Governance Components and Sustainability from the Perspective of Voluntary and Mandatory Disclosure

Factors Determining of Carbon Emissions Voluntary Disclosure in Indonesia’s Energy Sector Companies

Reporting information on carbon emission from company operations is a form of social and environmental responsibility that contributes to the reduction of greenhouse gas emissions to achieve the SDGs target by 2030. This carbon-related reporting is the role of accountants through carbon accounting as a form of transparency and accountability, as well as an effort to reduce GHGs emissions produced by companies. This research is intended to see how energy sector companies implement voluntary disclosure of carbon emissions with several determinants which is reflected in the company size scale, the exposure carried out by companies in the company’s website media, and shareholding owned by institutions. The research population is in energy sector companies listed on the Indonesia Stock Exchange (IDX) during 2018-2022. Samples of this research used purposive sampling, so that 50 observational data were obtained consisting of 10 energy sector companies in 5 years period. Result show that media exposure influences carbon emission disclosure. Companies that present media exposure have an increase in the carbon emission disclosure level. Meanwhile, firm size and institutional ownership have no influence on the carbon emission disclosure. A company with a large size scale and high institutional shareholding does not guarantee that it will report information of carbon emission thoroughly.

ANALISIS PENERAPAN AKUNTANSI LINGKUNGAN PADA INDUSTRI TEKSTIL YANG TERDAFTAR DI BEI

Currently, the problem of environmental damage has become a public concern. Textile companies are a significant source of environmental pollution due to the trash they generate throughout their production activities. Accounting contributes to environmental preservation by incorporating voluntary disclosure of environmental costs or expenses in financial statements. However, there is no standardized approach to environmental accounting disclosures within the PSAK.The study examines environmental cost accounting in 20 BEI-registered textile companies' financial statements or annual reports. The data comes from BEI-registered textile companies' annual financial statements. The study examined textile manufacturers' yearly accounting implementation using qualitative descriptive methods. Based on their corporate annual reports' CSR sections, only 10 out of 20 textile businesses have incorporated environmental accounting. Only 4 out of 10 corporations disclose their environmental expenditures in their financial or annual reports.

Do Reported Intangible Assets Create a Better Information Environment?

Purpose: This study investigates whether the identifiable intangible assets (IIA), goodwill (GW), and research and development expense (R&D) reported in the financial statements and annual reports of firms on the Stock Exchange of Thailand (SET) can improve the information environment, as represented by a narrower bid-ask spread in the capital market. Additionally, this study explores the impact of intangible asset disclosure scores on the information environment. Design/methodology/approach: This study tests the association between reported intangible assets, intangible asset disclosure score, and bid-ask spread. The sample is 2,691 firm-year observations in SET from 2012-2021, and ordinary least squares (OLS) regression is used to test the hypothesis. Findings: The results found that IIA and R&D are associated with the information environment. It is reported that IIA and bid-ask spread have a positive relationship, whereas R&D and bid-ask spread have a negative relationship. In addition, the intangible asset disclosure score can also reduce bid-ask spread. Research limitations/implications: This study highlights the benefits of intangible assets, which can help bridge the information gap. However, the intangible asset disclosure score is determined through self-index construction. This process involves discretion and may be prone to errors. Furthermore, using the bid-ask spread as the sole indicator of the information environment might be inadequate. Originality/value: Research on information asymmetry about intangible assets in Thailand is scarce. This study provides empirical evidence to support the benefit of some intangible assets in reducing asymmetric information among investors. By utilizing the intangible asset disclosure score, including mandatory and voluntary disclosure, it is also possible to observe how different disclosure quality levels impact the information environment.

Exploring the nexus between past financial performance and voluntary GRI adoption: The role of environmental certification

Numerous firms have adopted the Global Reporting Initiative (GRI) standards to enhance sustainability. Using panel data from 2008 to 2020, we employ logit, probit, complementary log-log, and Cox survival analysis models to explore the factors which affect the adoption of the GRI standards in the context of voluntary disclosure in China. Our findings indicate that past financial performance significantly influences decisions on GRI adoption. Environmental certification moderates the effect of financial performance on GRI adoption. Notably, the cross-sectional test reveals that financial performance plays a stronger role in GRI adoption among companies with low information transparency compared to those with high information transparency.

Investor-Paid Credit Ratings and Managerial Information Disclosure

Unlike issuer-paid credit rating agencies (CRAs), investor-paid CRAs are compensated by investors for providing rating services. Exploiting the staggered timing of rating initiation by an investor-paid rating agency (the Egan Jones Ratings (EJR)), I document that the coverage by EJR increases rated firm managers’ voluntary disclosure of negative news. Consistent with EJR’s rating coverage deterring managerial bad news hoarding by informing investors of downside risks, I find that the effect of EJR coverage is more pronounced when issuer-paid CRAs tend to assign inflated ratings and when rated firms’ managers have a stronger incentive to conceal bad news. I also document that firms unwind upward earnings management after being covered by EJR. In contrast, coverage by an issuer-paid CRA (Standard & Poor’s) is not associated with changes in managerial information disclosure. I conclude that investor-paid CRAs function as a type of effective information intermediary to discipline firm managers and improve corporate transparency. This paper was accepted by Brian Bushee, accounting. Funding: The author acknowledge financial support from the MOE Project of the Key Research Institute of Humanities and Social Science in University [Grants 22JJD790093 and 22JJD790094], the Program for Innovative Research Team of Shanghai University of Finance and Economics, and the 111 Project [Grant B18033]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2021.01914 .

Voluntary Disclosures and their Drivers: A Study of MDA Reports in India

The aim of this study is to examine the impact of corporate characteristics on voluntary disclosures of management discussion and analysis (MD&A) reports in India. Using a formal tone, the data was extracted from the annual reports of the top 100 listed firms available on the CMIE Prowess database for seven years (2016–2022). After excluding 23 companies from the financial and insurance sector, a panel regression method with the assistance of Gretl software was employed to investigate the relationship between the Management Discussion and Analysis Disclosure Index (MDADI) for voluntary aspects and various corporate attributes, with a total of 490 firm years of balanced observations. In India, firms follow the mandatory compliance of the MD&A reports, but voluntary disclosures are somehow those which are not much emphasized but are a good indication of firm performance and their accountability towards their stakeholders (Mayew et al., 2015). Our empirical findings reveal that profitability as a proxy to firm performance has a significant positive relationship with MD&A voluntary disclosures. Further, an insignificant association between VDS (Voluntary Disclosure Score) and the board size, presence of independent directors and firm size was found. This indicates that firm performance plays a significant role in adding more voluntary disclosures in MD&A reports. The possible reason for this could be the use of “Management Impression Strategy” in the MD&A reports, which means managers disclose more only when the firm has earned more and use impressive language to attract stakeholders. The outcomes of this research offer valuable insights for regulators, policymakers, and listed companies in India, aiding in the enhancement of MD&A reporting quality. Additionally, this study provides a roadmap for future research on MD&A reporting quality and corporate attributes in other emerging countries that have similar regulatory frameworks. This paper makes a timely and pertinent contribution to the scholarly discourse by shedding light on the relationship between MD&A disclosures and firm attributes. Its findings provide valuable insights for both academia and industry.

The politics of corporate social responsibility disclosure: Evidence from China

While businesses fluctuate with politics, firms try to find ways to deal with uncertainty. We investigate how political incentives shape corporate social responsibility (CSR) reporting activities using the setting of China. Based on a sample of non-mandatory CSR disclosure firms, we find that firms experiencing political turnover are more inclined to issue CSR reports voluntarily, supporting the political connection demand hypothesis rather than the political cost hypothesis. Such effects are more prominent when the political turnover is unexpected and successors are non-locals. Meanwhile, non-SOEs, not politically connected enterprises, and firms located in low government efficiency areas are more likely to issue CSR reports. Further analysis shows that these firms disclosed CSR information experiencing political turnover fail to ensure the reporting quality but can obtain resources in the future. Overall, we highlight that CSR disclosure is a way for firms to establish political connections with politicians. Our study sheds light on the determinants of voluntary CSR disclosure from a political perspective.

Reporting cybersecurity to stakeholders: A review of CSRD and the EU cyber legal framework

The purpose of this article is to explain, through a doctrinal review of the EU sustainability and cybersecurity legal framework, how the cybersecurity obligations contribute to the cybersecurity content and quality of the sustainability reporting. Previous studies are limited to voluntary cybersecurity disclosure in annual reports because they date back to before the adoption of CSRD. The CSRD harmonized sustainability reporting in the EU and introduced the ESRS, the standards for sustainability disclosure. As stated in the ESRS S4, the sustainability reporting should now address how the company manages the risks linked to data usage and data collection. Therefore, cybersecurity measures must be included in the sustainability report. This information can be used by stakeholders to assess the risk appetite and the potential long-term profitability of the company. The cybersecurity measures adopted by companies must comply with the cybersecurity obligations of the EU legal framework. While it is out of the scope of these cybersecurity obligations to inform ex ante the stakeholders of a company of how the company is managing cyber risks, these same obligations can improve the quality and content of the sustainability discourse.

Voluntary Disclosure in Asymmetric Contests

Abstract This article studies the incentives for interim voluntary disclosure of verifiable information in probabilistic all-pay contests with two-sided incomplete information. Private information may concern marginal cost, valuations, and ability. Our main result says that, if the contest is uniformly asymmetric, then full revelation is the unique perfect Bayesian equilibrium outcome. This is so because the weakest type of the underdog reveals her type in an attempt to moderate the favourite, while the strongest type of the favourite tries to discourage the underdog—so that the contest unravels. This strong-form disclosure principle is robust with respect to correlation, partitional evidence, randomized disclosures, sequential moves, and continuous type spaces. Moreover, the assumption of uniform asymmetry is not needed when incomplete information is one-sided. However, the principle may break down when type distributions are too similar, contestants possess commitment power, or information is unverifiable. In fact, cheap talk will always be ignored, even if mediated by a trustworthy third party.

Integrated Reporting: A Literature Review

Background: Integrated Reporting (IR) is an innovative and effective reporting model combining financial and non-financial information into a single report. Purpose: This paper reviews the literature concerning Integrated Reporting related to voluntary disclosure. The study analyses the theoretical foundations of Integrated reporting. It discusses the main dimensions of the concept from the perspective of the company and other stakeholders, highlighting the importance of Integrated Reporting and integrated thinking in how the companies communicate. It aims to summon these points of view and achieve, through a systematic literature review, a clear depiction of voluntary disclosure using Integrated Reporting. Methods: A systematic literature review was performed using the PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) methodology. Prisma is a framework of evidence-based elements designed to help authors conduct systematic literature reviews. Results: The results confirm the benefits a company can have when adopting quality integrated reporting. It promotes a long-term vision of corporate management, improves the diffusion of a culture of sustainability within the company, and promotes integrated thinking, an innovative strategic and cultural approach to corporate management. The limitations involved in adopting integrated reporting were also highlighted. Conclusion: This systematic literature review sought to consolidate knowledge on the subject. Opportunities for further empirical research in this area are suggested.

Pengaruh Implementasi Corporate Governance Terhadap Pengungkapan Sukarela (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia Periode 2017-2021)

The purpose of this study is to identify and analyze how much influence the implementation of Corporate Governance has on voluntary disclosure of manufacturing companies listed on the Indonesian Stock Exchange for the 2017-2021 period. There are four principles that must be applied so that the objectives of good corporate governance can be achieved, namely fairness, accountability, transparency and responsibility. Therefore, it is mandatory for all organs in the company to implement these principles, so in this research the author uses the variables independent board of commissioners, managerial ownership, and institutional ownership for voluntary disclosure. The population in this research is all manufacturing sector companies listed on the Indonesia Stock Exchange during the observation period, namely 2017-2021. The sample determination in this research was carried out using non-probability purposive judgment sampling, where the sample was determined based on certain criteria determined by the author and has limitations in terms of generalization. The results indicate that partially, the variables of independent board of commissioners and managerial ownership do not affect voluntary disclosure in the company's annual reports. However, institutional ownership variable significantly influences voluntary disclosure in the company's annual reports.

Analysis of Corporate Government Practices by Various Sectors in India : A Voluntary Disclosures from Annual Reports

Analysis of Corporate Government Practices by Various Sectors in India : A Voluntary Disclosures from Annual Reports

The role of internal audit, as one of the governance mechanisms, in improving the disclosure of social responsibility in the Sudanese banking sector.

The study aimed to show the importance of internal auditing and the extent of the interactive relationship between it in a way that improves voluntary disclosure of social responsibility. The researcher used the deductive approach in choosing the research problem and setting the scientific hypotheses, historical approach and also the statistics analysis that was dependable in the field study. The sample population of the study represented in accountants, financial reviewers and academics, the study concluded that the disclosure of audit reports and the degree of fluctuations to which the facility is exposed leads to predicting the extent of continuity of government agencies for their social responsibility. This study recommends the necessity of developing a guide for corporate governance mechanisms and standards in Sudan and developing and updating regulations and laws.

Revealed and reserved: a compensating approach of voluntary disclosure by family multinationals

Revealed and reserved: a compensating approach of voluntary disclosure by family multinationals

Does More Frequent Financial Reporting Bring the Future Forward?

SYNOPSIS Exploring mandatory financial reporting frequency changes in the United States from 1954 to 1972, we find that a mandatory increase in reporting frequency is associated with an increase in firms’ future earnings response coefficients. This effect is stronger for firms with higher sales seasonality or operating in industries with lower earnings persistence and for firms that provide more voluntary disclosures of forward-looking information after the reporting frequency increase. We also find that investors increase (decrease) the weight on long-term (near-term) earnings when pricing the firm after the reporting frequency increase. Our findings suggest that more frequent mandatory reporting can enhance the ability of investors to predict future earnings by providing additional useful information on future earnings and by triggering more voluntary disclosures. Our study informs the ongoing policy debates on mandatory financial reporting frequency by highlighting the informational benefit of frequent financial reporting for investors. Data Availability: Data are available from public sources identified in the paper. JEL Classifications: G14; M41; M48.