Impact of Board Independence on the Quality of Community Disclosures in Annual Reports

Accounting Forum, Volume 39, Issue.4, pp. 249–267

Posted: 7 Mar 2016

See all articles by Kemi C. Yekini

Kemi C. Yekini

De Montfort University, Leicester Business School

Ismail A. Adelopo

De Montfort University - Leicester Business School

Panagiotis Andrikopoulos

Centre for Financial and Corporate Integrity (CFCI), Coventry University

Liafisu Yekini

Coventry University

Date Written: December 2015

Abstract

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 FTSE350 companies the results indicate a statistically significant relationship between board independence, as measured by the proportion of non executive 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.

Keywords: Corporate governance, Non-executive directors, Board composition, Community disclosures, Stakeholders theory

JEL Classification: G34, M41

Suggested Citation

Yekini, Kemi C. and Adelopo, Ismail A. and Andrikopoulos, Panagiotis and Yekini, Liafisu, Impact of Board Independence on the Quality of Community Disclosures in Annual Reports (December 2015). Accounting Forum, Volume 39, Issue.4, pp. 249–267. Available at SSRN: https://ssrn.com/abstract=2742709

Kemi C. Yekini

De Montfort University, Leicester Business School ( email )

The Gateway
Leicester, LE1 9BH
United Kingdom

Ismail A. Adelopo

De Montfort University - Leicester Business School ( email )

Milton Keynes, MK7 6HP

Panagiotis Andrikopoulos (Contact Author)

Centre for Financial and Corporate Integrity (CFCI), Coventry University ( email )

Priory Street
Coventry, CV1 5FB
United Kingdom
+44(0)247 765 7920 (Phone)

Liafisu Yekini

Coventry University ( email )

William Morris building
Coventry Business School, Gosford Street
Coventry, CV1 5DL
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Abstract Views
570
PlumX Metrics