No abstract

This study examines the effect of the presence of foreign experts on a company’s board on the important characteristic of high-quality financial reporting: timeliness. We focus on experts with foreign experience (EFEs) who are board members, in the context of a dual board model. The sample is drawn from the population of Polish nonfinancial firms listed on the Warsaw Stock Exchange during 2010–2015. For analysis, we use the generalised method of moments with fixed effects. After controlling for corporate governance and firm characteristics, we find that the presence of EFEs shortens the time necessary to deliver financial reports. Our findings enrich the knowledge on the monitoring role of EFEs in corporate governance, especially in the context of the insider model of corporate governance and a dual board structure. The findings have significant implications for policy formulation and provide evidence that the presence of EFEs on supervisory boards may lead to increased timeliness of financial reporting, thus increasing financial reporting quality.

The European Insurance and Occupational Pensions Authority suggests that as the coronavirus disease 2019 (COVID-19) pandemic has caused significant disruption to the economy, businesses, and people’s lives, national supervisory authorities should mitigate the pandemic’s impact on the European insurance sector. The functioning of insurance companies is in danger as they must balance a drastic increase in the number of claims with their capital and solvency stability. In this study, we evaluate the effects of the COVID-19 pandemic on insurance companies using European insurance companies’ financial statement data from 2010 to 2020. The results unambiguously demonstrate that the pandemic has negatively affected the functioning of the insurance sector. In particular, the return on assets decreased in German and Italian insurance companies during the pandemic. Furthermore, the solvency ratio decreased in the Belgian, French, and German insurance sectors. Conversely, the Polish insurance sector was unaffected. Moreover, we did not find any effects on the Z-score ratio in our sample. Lastly, the value of receivables owed to Belgian insurance companies increased. Based on this evidence, we argue that European legislators should discuss how to manage the probable financial problems of insurance companies during the COVID-19 pandemic.

Drawing on resource dependency and upper echelons theories, we examine the relationship between directors' international orientation (IO) and the scope of nonfinancial disclosures (NFD) in a two-tier board structure. Evidence from a regression analysis on a sample of non-financial firms listed on the Warsaw Stock Exchange for the 2014-2018 period shows that the IO of supervisory board members significantly and positively impacts the scope of NFD. We also find that women with IO influence the scope of NFD, whereas accounting and finance experience decreases the focus on NFD elements, especially environmental information. The results imply that both the IO of the supervisory board and the bundle of characteristics facilitate the move toward sustainable development. The findings of our study should be of interest to companies, regulators and policymakers to integrate sustainability practices into their corporate strategies.

Purpose: This study investigates the determinants of audit committee (AC) formation in a semi-mandatory setting of a European economy, in which ownership and control are predominantly in the hands of families and business groups, and the voluntary practice of forming an AC has not been widely accepted. Methodology: This research uses a sample of Polish nonfinancial firms listed on the Warsaw Stock Exchange (WSE) in 2008–2015. The study implemented logistic regression to test the role of the supervisory board (SB) and companies’ compositional characteristics in AC creation. Findings: Primary analysis provided evidence of an inverted association between commonly accepted determinants of AC formation – such as the number of independent members on the supervisory board (SB) – and accounting and finance expertise of the SB members. The study also revealed that companies with foreign ownership are more likely to have an AC. Originality: This study indicates an important relationship between the existence of other SB committees as a meaningful determinant of AC formation. This article is valuable for supervisory bodies and regulators as they provide insights into factors that influence audit committee formation.