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An Analysis of the Readability of the Chairman’s Statement in South Africa

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  • Sinethemba Mankayi

    (School of Accounting, Economics and Finance, University of KwaZulu-Natal, Westville Campus, University Road, Westville, Private Bag X54001, Durban 4000, South Africa)

  • Frank Ranganai Matenda

    (School of Accounting, Economics and Finance, University of KwaZulu-Natal, Westville Campus, University Road, Westville, Private Bag X54001, Durban 4000, South Africa)

  • Mabutho Sibanda

    (School of Accounting, Economics and Finance, University of KwaZulu-Natal, Westville Campus, University Road, Westville, Private Bag X54001, Durban 4000, South Africa)

Abstract

Board members and the chairman of the board must provide shareholders and other stakeholders with annual reports that include the chairman’s statement. The statement provides an important message to stakeholders concerning financial performance, non-financial information and future outlook of the company. Stakeholders are concerned about the transparency and usefulness of the disclosed as this would have an impact on whether the chairman’s message is readable or not. The purpose of this study is to evaluate whether messages from the chairman of the board are readable or not. A sample of 40 Johannesburg Stock Exchange listed companies, for the financial period ending 2021, was selected to meet the study objectives. The Gunning Fog Index (Fog index) was applied to assess the readability of the chairman’s statement. The study found that it was difficult to read the chairman’s statements for the selected corporations and South African companies.

Suggested Citation

  • Sinethemba Mankayi & Frank Ranganai Matenda & Mabutho Sibanda, 2023. "An Analysis of the Readability of the Chairman’s Statement in South Africa," Risks, MDPI, vol. 11(3), pages 1-15, March.
    • Handle: RePEc:gam:jrisks:v:11:y:2023:i:3:p:54-:d:1090412
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    References listed on IDEAS

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    1. Gutiérrez‐Ponce Herenia & Chamizo González Julián & Manar Moffadi Awad Al‐mohareb, 2024. "Does corporate governance influence readability of the report by the chairman of the board of directors? The case of Jordanian listed companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3535-3550, July.

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