Purpose -This paper contributes to the existing disclosure literature by examining the determinants of narrative risk information in the interim reports for a sample of UK non financial companies.Methodology -This study uses the manual content analysis to measure the level of risk information in interim report narrative sections prepared by 72 UK companies. It also uses the OLS regression analysis to examine the impact of firm-specific characteristics and corporate governance mechanisms on narrative risk disclosures.Findings -The empirical analysis shows that large firms are more likely to disclose more risk information in the narrative sections of interim reports. In addition, the analysis shows that industry activity type is positively associated with levels of narrative risk disclosure in interim reports. Finally, the analysis shows statistically insignificant impact of other firmspecific characteristics (liquidity, gearing, profitability and cross-listing) and corporate governance mechanisms on narrative risk disclosure.Practical implications -The study's findings have practical implications. It informs investors about the characteristics of UK companies that disclose risk information in their interim reports. For example, the findings shows that narrative risk disclosures is affected by firm size and industry type rather than firms' risk levels (e.g. financing risk measured by the gearing ratio or liquidity risk measured by lower liquidity ratios). Practical implications for managers from these findings are that, in order to keep investors satisfied, companies with high levels of financing and liquidity risks should look at investors' demands for risk disclosure. This will help investors when making their investment decisions.Originality/value -The determinants of narrative risk disclosure in interim reports has not been explored so clearly in prior research and therefore this study is the first of its kind to examine this research issue for a sample of UK companies.

Going beyond the mere participation of female directors within boardrooms, we investigate which of the two major boards of directors' roles (advisory versus monitoring) is best played by female directors in order to make a difference to shareholders. More specifically, we investigate the impact that advisory and monitoring female directors have on managerial opportunism with a specific focus on earnings management. Using sample of US firms, we find evidence suggesting that female directors holding monitoring roles mitigate managerial opportunism, as measured by discretionary accruals. In contrast to the current argument that advisory directors in general are better able to sustain and improve earnings quality, we find no evidence that suggests that advisory female directors are significantly associated with lower managerial opportunism. Overall, the results remain robust after controlling for potential endogeneity problems, corporate governance, and external auditor quality.

Starting from 2006, UK listed companies are required to analyse their performance by using Key Performance Indicators (KPIs) in specific sections of their annual reports and the UK Accounting Standard Board (ASB) provides companies with guidelines for the best practice regarding KPI disclosure. Motivated by the possible effects of the KPI disclosure quality, we examine their potential economic consequences for a sample of UK listed firms for the period 2006 to 2010. Our sample consists of 448 firm-year observations. We first develop a measure for the quality of the KPI disclosure based on the ASB's guidelines. We then test the economic consequences of financial and nonfinancial KPIs disclosure quality both separately and combined into one variable. Our findings, after conducting various sensitivity tests, suggest that only the disclosure quality of financial KPIs matters. We find a significantly negative (weakly positive) relationship between disclosure quality of financial KPIs and the implied cost of capital (firm value). These results inform regulatory bodies as well as the academic literature about the potential economic consequences of this type of disclosure.

Starting from 2006, UK listed companies are required to analyse their performance by using Key Performance Indicators (KPIs) in specific sections of their annual reports and the UK Accounting Standard Board (ASB) provides companies with guidelines for the best practice regarding KPI disclosure. Motivated by the possible effects of the KPI disclosure quality, we examine their potential economic consequences for a sample of UK listed firms for the period 2006 to 2010. Our sample consists of 448 firm-year observations. We first develop a measure for the quality of the KPI disclosure based on the ASB's guidelines. We then test the economic consequences of financial and nonfinancial KPIs disclosure quality both separately and combined into one variable. Our findings, after conducting various sensitivity tests, suggest that only the disclosure quality of financial KPIs matters. We find a significantly negative (weakly positive) relationship between disclosure quality of financial KPIs and the implied cost of capital (firm value). These results inform regulatory bodies as well as the academic literature about the potential economic consequences of this type of disclosure.

Using a sample of UK firms, we investigate whether external audit quality has an informational role for firms credit score. In our general research setting, we could not find any evidence on the association between firms' credit score and external audit quality. However, when firms are suspected to be engaged in managerial misstatements, firms' credit score seems to be associated with external audit quality. In particular, suspected firms get high credit score when they are audited by one of industry-specialised auditors. In addition, credit rating agencies penalise suspect firms when they pay high audit and non-audit fees.

Purpose Corporate managers spend on research and development (R&D) for reasons of growth and survival. However, they may be less willing to invest in R&D because of its long-term horizon, high failure rate and uncertain outcomes. This study aims to explore the extent to which managerial ownership influences R&D expenditure decisions. Design/methodology/approach Apart from the linear regression models, this study uses a semi-parametric quantile regression analysis for a sample of German non-financial firms throughout 2009–2018. Findings This study finds a nonmonotonic sensitivity of R&D spending to the level of managerial ownership over various quantiles of R&D distribution. That is, managerial ownership increases the expenditure on R&D at low R&D intensity firms. However, it decreases the expenditure on R&D at high R&D intensity firms. These results suggest the presence of a maximum level of R&D expenditure, after which owner-managers would be unwilling to spend on R&D. Practical implications The results confirm the importance of corporate ownership structure for firm R&D and innovation activities. It provides an implication for corporate policymakers to reform the corporate ownership structures to encourage corporate managers and owners to invest in R&D projects. Originality/value This study offers two distinct contributions study. First, it provides the first German shred of evidence on the nonlinear relationship between managerial ownership and R&D expenditure decisions by distinguishing between high and low R&D intensity firms. Second, unlike prior research, it uses a semi-parametric quantile regression analysis. This method is more efficient than least-squares estimators and produces robust estimators to heteroscedasticity of the residuals.

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PurposeKuwait has taken significant steps to reform its corporate governance (CG) by introducing the New Company Law (NCL) in 2013. This study investigates how this reform of CG mechanisms affects the disclosure of future-oriented information. Likewise, it explores how CG mechanisms affect the informativeness of this disclosure.Design/methodology/approachThe sample comprises the nonfinancial firms listed on the Boursa Kuwait from 2014 to 2018. The study uses an automated textual analysis to measure the level of future-oriented disclosure in the annual reports of these firms. The informativeness of disclosure is proxied by firm value at three months of the date of the annual report.FindingsThe study finds that Kuwaiti firms with larger board sizes and substantial ownership by institutional investors are less likely to disseminate future-oriented information. Conversely, firms with more independent directors and larger audit committees are more inclined to provide future-oriented disclosure. Furthermore, the disclosure of future-oriented information carries contents that enhance investors' valuations of Kuwaiti firms, especially in firms with fewer institutional ownership and more prominent audit committees.Research limitations/implicationsIt focuses on management decisions to disclose information in the annual reports. Examining other channels of disseminating information, such as social media disclosure, provides avenues for future research.Practical implicationsPolicy setters in Kuwait should consider the importance of some CG mechanisms to improve the transparency of Kuwaiti firms, as suggested by the NCL. Likewise, investors should rely on such specific CG mechanisms to build their prospects about the firm's value.Originality/valueApart from developed countries, the current study is the first evidence on how CG mechanisms could affect the informativeness of future-oriented disclosure in a developing economy. It is also the first to investigate the new CG mechanism introduced by Kuwait NCL in 2013.