Impact of board independence on the quality of community disclosures in annual reports

K.C. Yekini; I. Adelopo; Panos Andrikopoulos; Sina Yekini

doi:10.1016/j.accfor.2015.05.004

Impact of board independence on the quality of community disclosures in annual reports

K.C. Yekini, I. Adelopo, Panos Andrikopoulos, Sina Yekini

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Abstract

This study investigates the link between board independence and the quality of community disclosures in annual reports. Using content analysis and a panel dataset from UK FTSE 350 companies the results indicate a statistically significant relationship between board independence, as measured by the proportion of nonexecutive directors, and the quality of community disclosures, while holding constant other corporate governance and firm specific variables. The study indicates that companies with more non-executive directors are likely to disclose higher quality information on their community activities than others. This finding offers important insights to policy makers who are interested in achieving optimal board composition and furthers our understanding of the firm's interaction with its corporate and extended environment through high-quality disclosures. The originality of this paper lies in the fact that it is the first to specifically examine the relationship between outside directors and community disclosures in annual reports. The paper contributes both to the corporate governance and community disclosure literature.

Original language	English
Pages (from-to)	349-367
Journal	Accounting Forum
Volume	39
Issue number	4
DOIs	https://doi.org/10.1016/j.accfor.2015.05.004
Publication status	Published - 22 Jun 2015

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in Accounting Forum. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Accounting Forum, [39, 4, (2015)] DOI 10.1016/j.accfor.2015.05.004
© 2015, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

Corporate governance
Non-executive directors
Board composition
Disclosure quality
Community disclosures
Stakeholders theory
Panel study

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10.1016/j.accfor.2015.05.004

Manuscript Final 02062015 (After panos - Last)Accepted author manuscript, 1.55 MB

Panagiotis Andrikopoulos
- Research Centre for Financial & Corporate Integrity - Centre Director
Person: Professional Services

Cite this

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title = "Impact of board independence on the quality of community disclosures in annual reports",

abstract = "This study investigates the link between board independence and the quality of community disclosures in annual reports. Using content analysis and a panel dataset from UK FTSE 350 companies the results indicate a statistically significant relationship between board independence, as measured by the proportion of nonexecutive directors, and the quality of community disclosures, while holding constant other corporate governance and firm specific variables. The study indicates that companies with more non-executive directors are likely to disclose higher quality information on their community activities than others. This finding offers important insights to policy makers who are interested in achieving optimal board composition and furthers our understanding of the firm's interaction with its corporate and extended environment through high-quality disclosures. The originality of this paper lies in the fact that it is the first to specifically examine the relationship between outside directors and community disclosures in annual reports. The paper contributes both to the corporate governance and community disclosure literature. ",

keywords = "Corporate governance, Non-executive directors, Board composition, Disclosure quality, Community disclosures, Stakeholders theory, Panel study",

author = "K.C. Yekini and I. Adelopo and Panos Andrikopoulos and Sina Yekini",

note = "NOTICE: this is the author{\textquoteright}s version of a work that was accepted for publication in Accounting Forum. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Accounting Forum, [39, 4, (2015)] DOI 10.1016/j.accfor.2015.05.004 {\textcopyright} 2015, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/",

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AU - Yekini, K.C.

AU - Adelopo, I.

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AU - Yekini, Sina

N1 - NOTICE: this is the author’s version of a work that was accepted for publication in Accounting Forum. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Accounting Forum, [39, 4, (2015)] DOI 10.1016/j.accfor.2015.05.004 © 2015, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

PY - 2015/6/22

Y1 - 2015/6/22

N2 - This study investigates the link between board independence and the quality of community disclosures in annual reports. Using content analysis and a panel dataset from UK FTSE 350 companies the results indicate a statistically significant relationship between board independence, as measured by the proportion of nonexecutive directors, and the quality of community disclosures, while holding constant other corporate governance and firm specific variables. The study indicates that companies with more non-executive directors are likely to disclose higher quality information on their community activities than others. This finding offers important insights to policy makers who are interested in achieving optimal board composition and furthers our understanding of the firm's interaction with its corporate and extended environment through high-quality disclosures. The originality of this paper lies in the fact that it is the first to specifically examine the relationship between outside directors and community disclosures in annual reports. The paper contributes both to the corporate governance and community disclosure literature.

AB - This study investigates the link between board independence and the quality of community disclosures in annual reports. Using content analysis and a panel dataset from UK FTSE 350 companies the results indicate a statistically significant relationship between board independence, as measured by the proportion of nonexecutive directors, and the quality of community disclosures, while holding constant other corporate governance and firm specific variables. The study indicates that companies with more non-executive directors are likely to disclose higher quality information on their community activities than others. This finding offers important insights to policy makers who are interested in achieving optimal board composition and furthers our understanding of the firm's interaction with its corporate and extended environment through high-quality disclosures. The originality of this paper lies in the fact that it is the first to specifically examine the relationship between outside directors and community disclosures in annual reports. The paper contributes both to the corporate governance and community disclosure literature.

KW - Corporate governance

KW - Non-executive directors

KW - Board composition

KW - Disclosure quality

KW - Community disclosures

KW - Stakeholders theory

KW - Panel study

U2 - 10.1016/j.accfor.2015.05.004

DO - 10.1016/j.accfor.2015.05.004

M3 - Article

SN - 1467-6303

VL - 39

SP - 349

EP - 367

JO - Accounting Forum

JF - Accounting Forum

IS - 4

ER -

Impact of board independence on the quality of community disclosures in annual reports

Abstract

Bibliographical note

Keywords

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Panagiotis Andrikopoulos

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