Strategy disclosures by listed financial services companies: Signalling theory, legitimacy theory and South African integrated reporting practices

Abstract

This paper investigates the current extent of social-, environmental-and economic-(SEE) related strategy disclosure of companies listed in the financial services sector of the Johannesburg Stock Exchange. It uses signalling and legitimacy theory to analyse the findings from a developed SEE strategy-related disclosure checklist.The paper finds social and environmental strategy-related disclosure is still secondary to economic strategy-related disclosures. This may be due to persistent focus on providers of financial capital and the need to perform financially. Further, the subsector's business model and how closely the subsector interacts with their customers is seen as a driver of social and environmental strategy-related disclosure to maintain their legitimacy and to reduce information asymmetry, reduce cost of capital and assure investors that these factors are being appropriately managed by the entity.Following from above, the banking, insurance and real estate subsectors presented the most strategy-related disclosure. This was linked to their high public accountability and daily interaction with customers, necessitating the need to manage their legitimacy and address adverse selection. The paper also proposes some areas for future research to understand the potential obstacles to incorporating social and environmental concerns into strategy and related disclosures.

Can voluntary environmental regulation promote corporate technological innovation?

“…Considering this point, future studies should concentrate more on the influencing factors between VER and innovation. Finally, because several studies find that firms with higher innovation performance are more willing to engage in VERs (Bae et al, 2018;Van Zijl et al, 2017), CTI and VER may be mutually causal.…”

“…However, according to signaling theory, information disclosure is an important channel for firms to show their achievements in technological innovation and performance growth (Bae et al, 2018). Van Zijl et al (2017) found that firms' willingness to disclose information was positively related to their business performance. In view of this fact, there may be interaction between EID and technological innovation.…”

Evidenciação da responsabilidade social corporativa nos estudos sobre relato integrado: uma revisão estruturada da literatura

“…As categorias que compõem o grupo de informações gerais foram adaptadas de Dumay et al (2016) Haji & Anifowose, 2017;Van Zijl et al, 2017), quanto na Europa (cf. Turturea, 2015;Romero et al, 2018;Woźniak & Pactwa, 2019).…”

“…A pesquisa normativa também é bem desenvolvida: 27% das publicações, principalmente no que diz respeito à análise da divulgação, como a extensão atual da evidenciação de estratégias relacionadas a aspectos sociais, ambientais e econômicos de empresas listadas no setor de serviços financeiros da Bolsa de Valores de Joanesburgo (Van Zijl et al, 2017); à análise da política socioambiental (Woźniak & Pactwa, 2019); à análise das divulgações de informações sociais e ambientais (Turturea, 2015) e outros.…”

Impact of Audit Committee Characteristics on Voluntary Disclosures: Evidence from Pakistan

“…Organizations publish additional information which is not required by regulatory bodies, in order to give positive signals to their investors enhancing favorable reputation (Verrecchia, 1983). Organizations use voluntary disclosure as a signaling mean and disclose additional information to strengthen the trust of investors (Zijl et al, 2017). (Chung and Kallapur, 2003) suggest that establishment of audit committee may be helpful in improving disclosure by reducing information asymmetry.…”