PurposeThe obfuscation hypothesis suggests that under‐performing firms will tend to obscure the meaning of their corporate narratives by deliberately adopting a textual complexity, most readily apparent through poor readability and the use of unnecessarily difficult language. This paper seeks to add to the literature in the area by comparing the textual complexity of corporate narratives, notably the chairman's statement, of main board and second board companies on the Bursa Malaysia (formerly known as the Kuala Lumpur Stock Exchange), with their financial performance, and also to examine the impact of company size, board membership and degree of statutory regulation on the readability of corporate narratives.Design/methodology/approachFollowing the existing literature this paper uses readability as a proxy for textual complexity, in addition to more direct measures, and seeks to examine relationships between textual complexity and various measures of financial performance.FindingsThe findings suggest that there are significant relationships between corporate language and financial performance, but that these are not consistent with the obfuscation hypothesis.Originality/valueThe findings are consistent with the suggestion that increased regulation and statutory monitoring of disclosures are associated with improved readability of narrative. They do not provide support for the obfuscation hypothesis.
The study investigates the influence of three types of ethical climate dimensions (egoism, benevolence and principle) on three types of wrongdoing in examining individuals' whistleblowing behaviour. It was found that, depending on types of wrongdoing, principle ethical climate is able to predict whistleblowing intentions. As for contextual predictors, seriousness of wrongdoing is the most consistent predictor for internal whistleblowing intentions. Results of this study are consistent with ethical climate theory and the finding confirms those from previous studies, by suggesting that organisational members have different reactions to different types of wrongdoings. Implications of the findings on Malaysian organisations for research and practice are discussed.
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