Impact of board independence on the quality of community disclosures in annual reports
Date
2015-06-22
Authors
Yekini, Cecilia Olukemi
Adelopo, Ismail
Andrikopoulos, Panagiotis
Yekini, Sina
Journal Title
Journal ISSN
ISSN
Volume Title
Publisher
Elsevier
Peer reviewed
Yes
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 non-executive 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.
Description
Keywords
Corporate governance, Non-executive directors, Board composition, Disclosure quality, Community disclosures, Stakeholders theory, Panel study
Citation
Yekini, K. C., et al. (2015) Impact of board independence on the quality of community disclosures in annual reports. Accounting Forum, 39, pp. 249-267