Governance Structures, Voluntary Disclosures and Public Accountability: The Case of UK Higher Education Institutions

Purpose: We investigate the extent of voluntary disclosures in UK higher education institutions’ (HEIs) annual reports and examine whether internal governance structures influence disclosure in the period following major reform and funding constraints. Design/methodology/approach: We adopt a modified version of Coy and Dixon’s (2004) public accountability index, referred to in this paper as a public accountability and transparency index (PATI), to measure the extent of voluntary disclosures in 130 UK HEIs’ annual reports. Informed by a multi-theoretical framework drawn from public accountability, legitimacy, resource dependence and stakeholder perspectives, we propose that the characteristics of governing and executive structures in UK universities influence the extent of their voluntary disclosures. Findings: We find a large degree of variability in the level of voluntary disclosures by universities and an overall relatively low level of PATI (44%), particularly with regards to the disclosure of teaching/research outcomes. We also find that audit committee quality, governing board diversity, governor independence, and the presence of a governance committee are associated with the level of disclosure. Finally, we find that the interaction between executive team characteristics and governance variables enhances the level of voluntary disclosures, thereby providing support for the continued relevance of a ‘shared’ leadership in the HEIs’ sector towards enhancing accountability and transparency in HEIs. Research limitations/implications: In spite of significant funding cuts, regulatory reforms and competitive challenges, the level of voluntary disclosure by UK HEIs remains low. Whilst the role of selected governance mechanisms and ‘shared leadership’ in improving disclosure, is asserted, the varying level and selective basis of the disclosures across the surveyed HEIs suggest that the public accountability motive is weaker relative to the other motives underpinned by stakeholder, legitimacy and resource dependence perspectives. Originality/value: This is the first study which explores the association between HEI governance structures, managerial characteristics and the level of disclosure in UK HEIs

Corporate governance in Turkey: implications for investments and growth

Background Paper for Turkey’s Investment Climate Assessment 200

Stealing from Thieves: Firm Governance and Performance when States are Predatory

We investigate how predatory government policies (expropriation, lack of property rights protection, corruption, crime) interact with managerial incentives in shaping firm governance structure. Our model shows that owners have lower incentives to encourage valuemaximization by managers if the government is likely to expropriate firm profits. This result emerges because it is more difficult for governments to seize firm profits that managers have already stolen and hidden from the owners. The model also demonstrates that the positive valuation effect of stronger firm governance is lower in states with more predatory governments. We test these predictions using several distinct data sets on firm governance and disclosure practices, and the business and financing obstacles firms face due to government intervention. The empirical results are consistent with the model's predictions. Specifically, we find that firms located in countries with more predatory governments practice weaker governance and disclose less information. Further, the previously documented positive relation between firm governance and firm performance is weaker or disappears altogether when governments pursue predatory policies. Finally, in countries with more predatory governments, firm-specific characteristics are less important in explaining variation in governance and firms have more similar governance structures.Managerial Incentives, Corruption, Expropriation, Property Rights Protection, Taxes, Governance, Disclosure, Valuation

Transparency, financial accounting information, and corporate governance

Audited financial statements along with supporting disclosures form the foundation of the firm-specific information set available to investors and regulators. In this article, the authors discuss economics-based research focused on the properties of accounting systems and the surrounding institutional environment important to effective governance of firms. They provide a framework for understanding the operation of accounting information in an economy, discuss a broad range of important research findings, present a conceptual framework for characterizing and measuring corporate transparency at the country level, and isolate a number of future research possibilities.Corporations - Accounting ; Stockholders ; Corporate governance

Measuring and Explaining the Productive Efficiency of Tax Offices. a Non-Parametric Best Practice Frontier Approach

In this paper we mimic an engineeriilg approach to the "production" of tax offices. Essentially one dominant physical input (labour) is converted into heterogeneous non-monetary outputs such as theNumber of audited returns with a different degree of complexity. Productive efficiency is evaluated against a best practice frontier using the non-parametric Free Disposal (FDH) method and Data Envelopment Analysis (DEA). We first calculate efficiency measures for 289 regional tax offices, responsible for the personal income tax in Belgium. Next we explain the differences in efficiency scores in terms of characteristics related to managerial skills/culture and organizational structures.

Corporate governance, Islamic governance and earnings management in Oman: A new empirical insights from a behavioural theoretical framework

Purpose: This paper examines the impact of corporate (CG) and Islamic (IG) governance mechanisms on corporate earnings management (EM) behaviour in Oman. Design/Methodology/Approach: We employ one of the largest and extensive datasets to-date on CG, IG and EM in any developing country, consisting of a sample of 116 unique Omani listed corporations from 2001 to 2011 (i.e.,1,152 firm-year observations) and a broad CG index containing 72 CG provisions. We also employ a number of robust econometric models that sufficiently account for alternative CG/EM proxies and potential endogeneities. Findings: First, we find that, on average, better-governed corporations tend to engage significantly less in EM than their poorly-governed counterparts. Second, our evidence suggests that corporations that depict greater commitment towards incorporating Islamic religious beliefs and values into their operations through the establishment of an IG committee tend to engage significantly less in EM than their counterparts without such a committee. Finally and by contrast, we do not find any evidence that board size, audit firm size, the presence of a CG committee and board gender diversity have any significant relationship with the extent of EM. Originality: To the best of our knowledge, this is a first empirical attempt at examining the extent to which CG and IG structures may drive EM practices that explicitly seeks to draw new insights from a behavioural theoretical framework (i.e., behavioural theory of corporate boards and governance). Keywords: Corporate governance, Islamic governance, earnings management, behavioural theory, endogeneity, Oman. Paper type: Research pape

Corporate social responsibility disclosure by state-owned enterprises in Indonesia

Purpose: This article aims to investigate the extent to which State-Owned Enterprises (SOEs) in Indonesia disclose their Corporate Social Responsibility (CSR) programs to the general public. Design/Methodology/Approach: Quantitative design is used as the main method in the study. Corporate profiling is used for analyzing SOEs profile and program profiling is used to analyze the profile of CSR programs implemented by SOEs. Findings: The study concludes that, first, SOEs under study disclose their CSR programs to the general public. In terms of indicators it is difficult to conclude that CSR programs disclosed by SOEs signify corporate virtuous citizenship embedding the initial ideas of CSR. Practical implications: Practical implications of the study are two-folds. First, that SOEs in Indonesia, need to strengthen the institutional drivers of CSR, and put pressure on companies to move beyond philanthropy, rhetoric, legitimization, imagery, and public relations to substantive engagement in CSR and genuine attempts at change and development. Second, the implementation of CSR programs by SOEs is judicially liable to public auditing. Originality/Value: The value of this study strengthens arguments which hold that the implementation of CSR, even implemented by SOEs, functions more as corporate survival mechanism rather than for solving social and environmental problems.peer-reviewe

International Effects of the Andersen Accounting and Auditing Scandals: Some Evidence from the US, UK and Australian Stock Markets

In this paper, we use event study methodology to examine the effect of two highly publicized accounting failures, at Enron and WorldCom both audited by Arthur Andersen, on the total stock returns of some companies in the UK also audited by Arthur Andersen. The results vary substantially between countries. We find no evidence of a significant impact in the UK or US. There is some evidence of negative abnormal returns at the time of the Enron scandal in Australia. However, this reaction was very short-lived and the negative abnormal returns on the stocks of Andersen-audited companies had been fully recovered within a week. Our results suggest that sharing an auditor with a firm that has issued corrections to accounts which have previously received an unqualified audit opinion does not significantly affect market perceptions of firms’ value, which suggests that the choice of auditor has little, if any, impact on market perceptions of the reliability of published financial information. Key words: Accounting scandals, Enron, WorldCom, Event study, International Stock Markets.