Risk reporting: Do country-level institutional forces really matter?

The annual reports of the non-financial European firms listed at the Euro Stoxx-50 index over the period of 2007 and 2011 were content analysed. This study intends to address two main issues: to what extent the country-level institutional forces compel (directly) firm’s risk reporting behaviour and in which way these country-level institutional forces moderate the relationship between risk reporting and firm-level characteristics. Main findings indicate that, during this period the European listed companies disclosed more risk information on a voluntary basis (such as operational and strategic risks) and with better informative content (more forward-looking and focused on positive news). Consistent with institutional theory, findings confirm that the country-level institutional forces explain variations on risk reporting. Additionally, it also indicates that the relationship between risk reporting and leveraged firms is weaker among countries with stronger institutional forces. These findings have several implications for investors and regulators in Europe basically in helping achieve efficiency in investment decisions and to stimulate further efforts to improve risk reporting regulations. This study makes two major contributions. First, it extends Elshandidy’s et al. (2015) work by using other country-level institutional forces that capture the efficacy of corporate boards, the protection of minority shareholders’ interests, country’s level of democracy, law enforcement mechanisms, and press freedom. Second, it uses firms that are considered as a Blue-chip representation of super-sector leaders in the Eurozone (but from different institutional contexts). This research setting can be more insightful in shedding some light towards our understanding on how these leading firms can promote innovative and high quality level of RR and how country-level driving forces influence these variables.info:eu-repo/semantics/acceptedVersio

Determinants of risk reporting by portuguese and spanish non-finance companies

Purpose – The paper seeks to assess the risk reporting practices across two European Latin countries (Portugal and Spain). Moreover, drawn on elements of agency, legitimacy, resources-based perspectives, and institutional theory this study also intends to assess if the influence of corporate governance mechanisms on risk reporting is mediated by strategic/institutional legitimacy interests. Design/methodology/approach – From a sample of 60 non-finance Portuguese and Spanish companies with securities traded on the Euronext Lisbon stock exchange market and on the Madrid stock exchange market, respectively, at December, 2011, the Corporate Governance reports and the “risk/risk management” sections of the Management reports included on consolidated annual reports for 2011 were manually content analyzed, according to prior literature. Further, multiple linear regressions were used to assess the potential relationships between corporate governance mechanisms and risk reporting. Findings – Results indicate that visible companies, operating in a country with a weaker legal environment, and during periods of financial distress disclose more discretionary RRD, basically to contextualize their negative outcomes. Some corporate governance mechanisms were crucial to improve risk information. Originality – The paper goes beyond prior literature work and assesses if the theoretical framework grounded on agency, legitimacy, resources-based perspective, and institutional theory is suitable in explaining RRD in an under-researched setting (European Latin countries, such as Portugal and Spain with low agency costs and different corporate governance models). Moreover, the analysis embraces a wider and homogeneous range of internal and external corporate governance mechanisms and uses a period in which both countries were severely affected by a sovereign debt crisis with negative impacts on company’s liquidity and financial risks. A research setting like this has not been studied hitherto.info:eu-repo/semantics/acceptedVersio

Corporate risk reporting: analysis of risk disclosures in the interim reports of public Portuguese non-financial companies

Fast changing environments, globalization, coupled with financial scandals, and the advance of information technologies made corporate risk a very central issue in management and accounting. Current governance codes require that management disclose in annual reports its responsibility for the adequacy of risk management and internal control systems and the disclosure of risk and uncertainties faced by companies are required by both governance codes and corporate reporting. This study seeks to capture risk disclosure patterns adopted by public Portuguese companies in interim reports and to investigate whether the audit quality may explain the observed risk disclosures practices. Manual content analysis has been carried out in the interim reports of 35 non-financial Portuguese firms ranked by decreasing market capitalization to create indexes of corporate risk disclosure, which have been used for observing the tone of disclosure and for testing an explanatory model with proxies of audit quality together with other explanatory variables widely used in disclosure research. Results point out that quantified risk disclosure prevails in interim reports and that firm’s risk disclosure policies are not influenced by auditor’s quality. This work contributes to academic and regulatory environments, filling the gap about risk disclosure in the interim report, identifying the nature of corporate risk disclosures, assessing the quality of risk information and updating research about determinants of risk disclosure in interim reports.info:eu-repo/semantics/publishedVersio

Nursing home residents: the dimension of frailty

Background: Frailty is a state of increased vulnerability with multisystem loss of physiologic reserves and decreased response to stressors, predicting adverse health outcomes. The phenotype of frailty is characterized by unintentional weight loss, self-reported exhaustion, weakness (low grip strength), slow walking speed, and low physical activity. This study aimed at assessing the prevalence and characteristics of frailty in a sample of institutionalized older people to identify a target intervention group. Methods: This is a descriptive cross-sectional and correlational study. Participants were 226 men and women living in nursing home facilities. Frailty was assessed using the phenotype of frailty. Sociodemographic, health status, physical and cognitive function, and depression data were collected. Relations between variables were analyzed using parametric (t test, Pearson coefficient) and nonparametric (chi-square and Spearman coefficient) tests. A multiple linear regression model was applied to assess the relationship between the frailty criteria and a set of predictor variables. Results: Assessment of frailty was possible in 35.3% of the subjects and 41.5% were found frail, 52.1% prefrail, and 6.4% nonfrail. Three frailty criteria had higher prevalence: weakness (76.6%), low physical activity (61.7%), and low walking speed (52.1%). The number of frailty criteria per subject was significantly correlated with cognitive status and depressive symptoms, and there was weak, though significant, correlation with the Barthel Index. Participants in frailty tests had a better functional and cognitive state than those unable to participate. No significant difference in depressive symptoms was found between these 2 groups. The multiple regression model explained only 21.6% of the variation of frailty. Conclusions: Subjects revealed low social status, advanced age comorbidity, and multifactorial incapacity. In a nursing home setting, frail and prefrail elderly stand out as a subset in the sample with higher functional status, as opposed to the usual findings in community-dwelling older adults. These facts should help recognize them as a target intervention group, as frail elderly are vulnerable and their needs might be underestimated in a setting where highly dependent people represent a huge burden for caretakers. Targeted interventions may improve their condition, prevent adverse health events, and preserve quality of life.info:eu-repo/semantics/acceptedVersio

Pecking order theory versus trade-off theory : are service SMEs’ capital structure decisions different?

This paper seeks to analyse if the capital structure decisions of service small and medium-sized enterprises (SMEs) are different from those of other types of firm. To do so, we consider four research samples: (i) 610 service SMEs; (ii) 126 service large firms; (iii) 679 manufacturing and construction SMEs; and (iv) 132 manufacturing and construction large firms. Using the two-step estimation method, the empirical evidence obtained in this study shows that the capital structure decisions of service SMEs are different from those of other types of firm. Service SMEs’ capital structure decisions are closer to the assumptions of Pecking Order Theory and further removed from those of Trade-Off Theory compared with the case of other types of firm