Governance Quality and Information Alignment

Elbadry, Ahmed; Gounopoulos, Dimitrios; Skinner, Frank S.

doi:10.2139/ssrn.1537693

Cited by 2 publications

(6 citation statements)

References 73 publications

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“…Independent directors effectively control managerial decisions and reduce information asymmetry (Sougne et al, 2013). Elbadry (2010) concludes in his study that independent directors have a negative relationship with information asymmetry. Sun et al, (2012), Agyei-Mensah (2017), andWu (2019) produced the same results in their studies.…”

Section: Board Composition and Information Asymmetrymentioning

confidence: 97%

“…If bonuses and rewards are performance-based and the higher the amount of compensation to the CEO, the lower level of asymmetric information. A combination of long-term incentives with bonuses scheme and executive benefits will boost performance and reduce information asymmetry (Elbadry and Skinner, 2010). Elbadry (2010) found a negative relationship between CEO remuneration and information asymmetry in UK institutions.…”

Section: Ceo Remuneration and Information Asymmetrymentioning

confidence: 99%

“…A combination of long-term incentives with bonuses scheme and executive benefits will boost performance and reduce information asymmetry (Elbadry and Skinner, 2010). Elbadry (2010) found a negative relationship between CEO remuneration and information asymmetry in UK institutions.…”

Section: Ceo Remuneration and Information Asymmetrymentioning

confidence: 99%

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Corporate Governance and Information Asymmetry

Akmal¹,

Rashid²,

Amin³

2022

Forman J. econ. stud.

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The financial industry is regarded as the backbone of the economy, and good corporate governance is critical to its smooth operation. Keeping in view the importance of corporate governance, this study aims to empirically investigate the impact of corporate governance on information asymmetry with moderating role of institutional quality of Islamic and conventional financial institutions. We used unbalanced panel data from 2006 to 2017 of 49 financial institutions including commercial banks, insurance companies, and Modaraba companies. A two-step system-Generalize Method of Moments (GMM) estimator is used to mitigate the endogeneity problem. Corporate governance of Conventional Financial Institutions (CFIs) is significantly related to information asymmetry however, the board size, and board composition of Islamic Financial Institutions (IFIs) are insignificant with asymmetric information index (AII). Further, the size of the shari’ah board is negatively and significantly related to AII. Institutional Quality (IQ) is significantly contributed toward the reduction of information asymmetry and plays a role as a moderator. Further, the impact of corporate governance on IFIs and CFIs differs due to the nature and contractual relationship of the parties and the institution’s type. The results of the study reveal that good quality institutions are important for corporate governance structure and the reduction of information asymmetry in financial institutions.

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Section: Board Composition and Information Asymmetrymentioning

confidence: 97%

Section: Ceo Remuneration and Information Asymmetrymentioning

confidence: 99%

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Corporate Governance and Information Asymmetry

Akmal¹,

Rashid²,

Amin³

2022

Forman J. econ. stud.

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“…Board diversity can be enhanced through gender diversity, the presence of more independent directors, and a mix of young and old directors (Ginesti and Drago, 2018; Elbadry et al , 2015; Xu et al , 2018). It is opined that there is a decline in stakeholder conflict in workplaces that promote gender equality and diversity (Adams et al , 2011).…”

Section: Institutional Settingmentioning

confidence: 99%

“…Independent directors are unlikely to be manipulated and are associated with improved readability by monitoring management (Elbadry et al , 2015). Independent boards are associated with actions that promote transparency and reduction of opportunistic practices that are self-seeking including earnings management and hence improvement in corporate reporting (Jensen and Meckling, 1976).…”

Section: Institutional Settingmentioning

confidence: 99%

Sustainability reporting, board diversity, earnings management and financial statements readability: evidence from an emerging economy

Ndegwa

2023

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Purpose This paper aims to investigate the moderating effect of sustainability reporting on the relationship between the independent variables of board diversity, and earnings management and the dependent variable of readability of financial statements. Design/methodology/approach The study panel data regression analysis involved 36 Kenyan-listed companies from 2016 to 2020. Findings Key findings were that increased board diversity was found to significantly improve the readability of financial statements. Discretionary earnings management was found to significantly reduce the readability of financial statements. Sustainability reporting was found to significantly increase the readability of financial statements, and it moderated the relationship between board diversity, earnings management and financial statements readability in Kenya. Research limitations/implications The study sample of 36 non-financial listed in the Nairobi Securities Exchange was very small and was affected by the problem of thin trading; hence, caution should be adopted when interpreting the findings. Practical implications The Capital Markets Authorities (CMA) as a policymaker should enforce sustainability reporting by Kenyan listed firms as there is evidence that the reporting enhances the readability of financial statements. The Institute of Certified Public Accountants as a policymaker should closely monitor the published financial statements of firms for earnings management and punish the perpetrators, as there is empirical evidence that the practice reduces the readability of financial statements. Social implications Sustainability reporting is successful as a moderating variable between readability of financial statements and determinants of readability of financial statements. Originality/value This study contributes to knowledge by studying sustainability reporting as a moderating variable between the independent variables of board diversity and earnings management and the dependent variable of readability of financial statements and measured sustainability reporting using a dummy variable for the period before and after the enactment and release of CMA code of 2016 on corporate governance that required sustainability reporting by Kenyan listed companies.

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Governance Quality and Information Alignment

Cited by 2 publications

References 73 publications

Corporate Governance and Information Asymmetry

Corporate Governance and Information Asymmetry

Sustainability reporting, board diversity, earnings management and financial statements readability: evidence from an emerging economy

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