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Corporate governance efficiency and internet financial reporting quality

Author

Listed:
  • Laurent Botti
  • Sabri Boubaker
  • Amal Hamrouni
  • Bernardin Solonandrasana

Abstract

Purpose - – This paper aims to shed some light on the role of boards of directors in improving internet financial reporting (IFR) quality. Design/methodology/approach - – The empirical study uses a data envelopment analysis (DEA) approach on a sample of 32 French firms belonging to the CAC40 index as of December 2007. Findings - – The empirical results show that 28 percent of the sample firms are located on the efficiency frontier for all IFR components. These firms' boards of directors and their committees seem to act as effective monitors of top executives, which improves the quality of the firm's disclosure policy through,inter alia, an increase in the level of IFR. Under efficient board control, firms develop user-friendly and readily accessible web sites disclosing the information required by various stakeholders. Additional empirical results show that 46.9 percent of the sample firms lie outside the efficiency frontier for all IFR measures, suggesting inefficiencies in the composition, structure, and/or functioning of their boards of directors. The inefficient monitoring and oversight of top executives by the board allowed for lower levels of IFR quality for nearly half of the CAC40 firms in 2007. Research limitations/implications - – The study uses only CAC40 companies, which are relatively large and financially healthier than the average French firms, exhibiting diffuse ownership structures, with heavy foreign shareholding, and investing more in communications. This may limit the generalizability of the results to other French listed firms. Originality/value - – The paper extends the literature on corporate governance and voluntary corporate disclosure by investigating the association between board characteristics and IFR quality. It examines the relative performance of the board directors in improving IFR policy.

Suggested Citation

  • Laurent Botti & Sabri Boubaker & Amal Hamrouni & Bernardin Solonandrasana, 2014. "Corporate governance efficiency and internet financial reporting quality," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 13(1), pages 43-64, February.
  • Handle: RePEc:eme:rafpps:v:13:y:2014:i:1:p:43-64
    DOI: 10.1108/RAF-11-2012-0117
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    Cited by:

    1. Helmi Hammami & Thanh Ngo & David Tripe & Dinh-Tri Vo, 2022. "Ranking with a Euclidean common set of weights in data envelopment analysis: with application to the Eurozone banking sector," Annals of Operations Research, Springer, vol. 311(2), pages 675-694, April.
    2. Mohamed Dia & Amirmohsen Golmohammadi & Pawoumodom M. Takouda, 2020. "Relative Efficiency of Canadian Banks: A Three-Stage Network Bootstrap DEA," JRFM, MDPI, vol. 13(4), pages 1-25, April.
    3. Mohammed Ali Ahmed Al-Sharafi & Shu Tong & Abdullah Aloqab, 2021. "The Effective Role of Internal Factors on Reconstructing Telecom Companies: The Case of Yemen Telecom," Sustainability, MDPI, vol. 13(3), pages 1-23, February.
    4. Maryam Safari & Barry J. Cooper & Steven Dellaportas, 2016. "The Influence of Remuneration Structures on Financial Reporting Quality: Evidence from Australia," Australian Accounting Review, CPA Australia, vol. 26(1), pages 66-75, March.
    5. Imen Derouiche & Riadh Manita & Anke Muessig, 2021. "Risk disclosure and firm operational efficiency," Annals of Operations Research, Springer, vol. 297(1), pages 115-145, February.
    6. Robert Jao & Mediaty & Djabir Hamzah & Kevin Winar & Abdul Rakhman Laba, 2019. "The Effect of the Board of Commissioners and Audit Committees Effectiveness on Internet Financial Reporting," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(2), pages 37-48, April.
    7. Hong‐Jing Lin & Che‐Chien Chen & Yung‐ho Chiu & Tai‐Yu Lin, 2022. "How financial technology (fintech) can improve the business performance of securities firms by using the dynamic data envelopment analysis modified model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 1113-1132, June.

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