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

Yekini, Kemi C.; Andrikopoulos, Panagiotis; Andrikopoulos, Panos; Adelopo, Ismail; Yekini, Sina

Authors

Kemi C. Yekini

Panagiotis Andrikopoulos

Panos Andrikopoulos

Ismail Adelopo Ismail.Adelopo@uwe.ac.uk
Associate Professor in Accounting and Finance

Sina Yekini



Abstract

© 2015 Elsevier Ltd. 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.

Journal Article Type Article
Publication Date Dec 1, 2015
Journal Accounting Forum
Print ISSN 0155-9982
Electronic ISSN 1467-6303
Publisher Taylor & Francis (Routledge)
Peer Reviewed Peer Reviewed
Volume 39
Issue 4
Pages 249-267
Institution Citation Andrikopoulos, P., Yekini, K. C., Yekini, K., Adelopo, I., Andrikopoulos, P., & Yekini, S. (2015). Impact of board independence on the quality of community disclosures in annual reports. Accounting Forum, 39(4), 249-267. https://doi.org/10.1016/j.accfor.2015.05.004
DOI https://doi.org/10.1016/j.accfor.2015.05.004
Keywords corporate governance, non-executive directors, board composition, disclosure quality, community disclosures, stakeholders theory, panel study
Publisher URL http://dx.doi.org/10.1016/j.accfor.2015.05.004

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