Corporate governance efficiency and internet financial reporting quality

Abstract

Purpose – This paper aims to shed some light on the role of boards of directors in improving internet financial reporting (IFR) quality. Design/methodology/approach – The empirical study uses a data envelopment analysis (DEA) approach on a sample of 32 French firms belonging to the CAC40 index as of December 2007. Findings – The empirical results show that 28 percent of the sample firms are located on the efficiency frontier for all IFR components. These firms' boards of directors and their committees seem to act as effective monitors of top executives, which improves the quality of the firm's disclosure policy through, inter alia, an increase in the level of IFR. Under efficient board control, firms develop user-friendly and readily accessible web sites disclosing the information required by various stakeholders. Additional empirical results show that 46.9 percent of the sample firms lie outside the efficiency frontier for all IFR measures, suggesting inefficiencies in the composition, structure, and/or functioning of their boards of directors. The inefficient monitoring and oversight of top executives by the board allowed for lower levels of IFR quality for nearly half of the CAC40 firms in 2007. Research limitations/implications – The study uses only CAC40 companies, which are relatively large and financially healthier than the average French firms, exhibiting diffuse ownership structures, with heavy foreign shareholding, and investing more in communications. This may limit the generalizability of the results to other French listed firms. Originality/value – The paper extends the literature on corporate governance and voluntary corporate disclosure by investigating the association between board characteristics and IFR quality. It examines the relative performance of the board directors in improving IFR policy.

Relative Efficiency of Canadian Banks: A Three-Stage Network Bootstrap DEA

“…Indeed, the results of the models are sensitive to these choices. An interested reader could refer to Botti et al (2014) and Boubaker et al (2018). Another limitation is the static nature of the DEA models.…”

An International Comparison of the Determinants and Financial Information Quality in XBRL Reporting Environment

“…These dimensions were measured through the use of indexes and most of them focus only for companies situated in one specific countries, for example Malaysia (Ali Khan and Ismail, 2011a;Saleh and Arussi, 2009), Egypt (Aly and Simon, 2009), Japan (Marston, 2003), China (Lan, Wang, and Zhang, 2013), Jordan (AlHtaybat, Von Alberti-Alhtaybat, and Hutaibat, 2011), Indonesia (Puspitaningrum and Atmini, 2012) and French (Botti et al, 2014). These IFR studies reported that firm size, type of industry, company characteristics and corporate governance are the major determinants of such quality.…”

“…R. Pinsker & Li, 2008). As currently companies are increasingly using the internet to disclose a wide range of reports and documents about their activities (Botti, Boubaker, Hamrouni, & Solonandrasana, 2014), none of the previous studies looked into the effect of XBRL implementation towards internet financial reporting (IFR) quality in order to reduce information asymmetry and eventually to attract more investors. Hence, the first research question is does companies who are operating in XBRL-mandated reporting environment provide a superior quality of IFR then the none-XBRL reporting environment?…”

Corporate Ownership, Internet Penetration and Internet Financial Reporting: Evidence from the Gulf Cooperation Council Countries

“…Prior studies (e.g., Al-Shammari, 2007;, including those conducted in the GCC countries, indicate that the variation or differences noted in the level of IFR disclosure between these countries are expected. This is attributed to the differences in capital market development, differences in macroeconomic trends and differences in corporate governance practices and reporting (Bartulović & Pervan, 2012;Botti et al, 2014). Evidence was traced to the Behavioural Assessment Score for Investors and Corporations (BASIC) which had observed that companies in the GCC region had received a low score on disclosure (3.24/10.0).…”

“…Botti, Boubaker, Hamrouni, & Solonandrasana, 2014), our study focusses on the governance aspect which involves the composition of corporate ownership structure. This is because unlike developed markets, emerging countries face issues such as agency costs which have resulted from the conflicts that exist between controlling owners and minority shareholders and not conflicts between managers and owners (Fan & Wong, 2002).…”