Strategic Information Disclosure through Integrated Reporting : A study on OMXS30-listed companies’ compliance with the <IR> Framework content element Strategy and Resource Allocation

Background and problem – As a result of financial crises and the realization of a broader stakeholder network, recent decades have seen an increase in stakeholder demand for non- financial information in corporate reporting. This has led to a situation of information overload where separate financial and sustainability reports have developed in length and complexity interdependent of each other. Integrated reporting has been presented as a solution to this problematic situation. The question is whether the corporate world believe this to be the solution and if the development of corporate reporting is heading in this direction. Purpose - This thesis aims to examine and assess to what extent companies listed on the OMX Stockholm 30 (OMXS30), as per 2016-02-28, comply with the Strategic content element of the <IR> Framework and how this disclosure has developed since the framework’s pilot project and official release by using a self-constructed disclosure index based on its specific items. Methodology – The purpose was fulfilled through an analysis of 104 annual reports comprising 26 companies during the period of 2011-2014. The annual reports were assessed using a self-constructed disclosure index based on the <IR> Framework content element Strategy and Resource Allocation, where one point was given for each disclosed item. Analysis and conclusions – The study found that the OMXS30-listed companies to a large extent complies with the strategic content element of the <IR> Framework and that this compliance has seen a steady growth throughout the researched time span. There is still room for improvement however with a total average framework compliance of 84% for 2014. Although many items are being reported on, there are indications that companies generally miss out on the core values of Integrated reporting. 

Corporate governance and cost of capital: evidence from Pakistani listed firms

This thesis investigates the effectiveness of Corporate Governance (CG) reforms in Pakistan. Using a sample of 160 Pakistani firms from 2003 to 2013 and governance data collected manually from the annual reports, this thesis investigates seven closely related and important corporate issues that are related to the compliance of governance rules. Specifically, it aims to : (i) investigate the degree of CG compliance with 2002 Pakistani Code of CG (PCCG); (ii) determine whether the introduction of 2002 PCCG has improved Pakistani CG practices; (iii) investigate the determinants of CG compliance and disclosure for Pakistani listed firms; (iv) test the nexus between CG compliance with the 2002 PCCG and firms’ cost of capital (COC); (v) investigate the impact of different individual CG mechanisms on listed firms COC; (vi) examine how different ownership structures impact on firms’ COC; and (vii) analyse relationship between CG structures and Cost of Equity (COE) as well as Cost of Debt (COD) for Pakistani listed firms. These empirical investigations report some important results. First, the reported findings suggest that Pakistani firms have responded positively to governance disclosure requirements over the eleven year period from 2003 to 2013. The results also show that the introduction of the PCCG in 2002 has improved CG standards by Pakistani listed firms. Second, the reported results related to the determinants of CG compliance demonstrate that significant and positive association between institutional, government and foreign ownership with CG compliance. However, findings relating to the determinants of CG compliance show a negative and significant association between board size and block ownership with CG compliance and disclosure. The study finds no significant relationship between director ownership, audit firm size and the presence of female board members with the constructed Pakistan Corporate Governance Index (PCGI). Third, the investigation on the relationship between CG and COC report a significantly negative nexus between PCGI and firms’ COC. The investigation on the association between ownership structures and COC report a negative and significant nexus between block ownership with firms’ COC. Further, a number of robustness analyses performed in this study suggest that the empirical results reported in this study are generally robust to the alternative CG variables, alternative COC variables and potential endogeneity problems.

Three essays on corporate taxation : financial reporting, value, and firm creation

Doutoramento em Gestão

The effect of board capital and CEO power on corporate social responsibility disclosures

This study examines the effect of directors’ human and social capital (i.e. board capital) on the level of corporate social responsibility (CSR) disclosures by drawing on insights from a resource-based view. It also investigates the effect of chief executive officer (CEO) power on this relationship. Data were obtained from annual reports of companies listed on the Dhaka Stock Exchange in Bangladesh from 2005 to 2013. We employ outside directors’ experiences and expertise as a proxy for board capital and measure CEO power using a ‘power index’ that comprises CEO duality, ownership, tenure and family CEO status. Results show that board capital is positively associated with CSR disclosure levels; however, CEO power is negatively associated with CSR disclosures and reduces the effect of board capital on CSR disclosures. Thus, we conclude that although board capital can improve CSR practices, CEO power can also inhibit these practices.

Analysis of the corporate political activity of major food industry actors in Fiji

BACKGROUND: Non-communicable diseases (NCDs) are the leading cause of mortality in Fiji, a middle-income country in the Pacific. Some food products processed sold and marketed by the food industry are major contributors to the NCD epidemic, and the food industry is widely identified as having strong economic and political power. However, little research has been undertaken on the attempts by the food industry to influence public health-related policies and programs in its favour. The "corporate political activity" (CPA) of the food industry includes six strategies (information and messaging; financial incentives; constituency building; legal strategies; policy substitution; opposition fragmentation and destabilisation). For this study, we aimed to gain a detailed understanding of the CPA strategies and practices of major food industry actors in Fiji, interpreted through a public health lens.

METHODS AND RESULTS: We implemented a systematic approach to monitor the CPA of the food industry in Fiji for three months. It consisted of document analysis of relevant publicly available information. In parallel, we conducted semi-structured interviews with 10 stakeholders involved in diet- and/or public health-related issues in Fiji. Both components of the study were thematically analysed. We found evidence that the food industry adopted a diverse range of strategies in an attempt to influence public policy in Fiji, with all six CPA strategies identified. Participants identified that there is a substantial risk that the widespread CPA of the food industry could undermine efforts to address NCDs in Fiji.

CONCLUSIONS: Despite limited public disclosure of information, such as data related to food industry donations to political parties and lobbying, we were able to identify many CPA practices used by the food industry in Fiji. Greater transparency from the food industry and the government would help strengthen efforts to increase their accountability and support NCD prevention. In other low- and middle-income countries, it is likely that a systematic document analysis approach would also need to be supplemented with key informant interviews to gain insight into this important influence on NCD prevention.

Board leadership, outside directors’ expertise and voluntary corporate disclosures

This study examines the linkages between board leadership structure in terms of CEO duality (CEOs who jointly serve as board chairs), the proportion of expert outside directors on the board (PENEDs) and voluntary corporate disclosures. Regression analyses of observations from 385 Hong Kong companies show that CEO duality is associated with lower levels of voluntary corporate disclosures. However, the negative CEO duality/voluntary disclosure association is weaker for firms with higher PENEDs suggesting that the expertise of non-executive directors (NEDs) moderates the CEO duality/corporate disclosures relationship.

Remuneration committee effectiveness and narrative remuneration disclosure

This paper investigates the impact of the effectiveness of remuneration committees on narrative voluntary disclosure of information on remuneration. We develop a composite measure as a proxy for remuneration committee effectiveness by incorporating remuneration committee size, remuneration committee independence, remuneration committee chairman’s independence, expertise and diligence. We find that both the existence and quality of a remuneration committee play a significant role in the decision to provide voluntary disclosure of remuneration actions and in the extent of this disclosure. Further analysis suggests that remuneration committee independence and diligence enhance the quality of remuneration committees. The results have policy implications for remuneration committees as an effective corporate governance mechanism.