The impact of corporate governance on integrated reporting (IR) quality and sustainability performance: evidence from listed companies in South Africa

Mahlaximi Adhikari Parajuli, Mehul Chhatbar, Abeer Hassan

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Abstract

Purpose
This study aims to measure the relationship between corporate governance and non-financial reporting (NFR) in higher education institutions (HEIs). Board effectiveness, student engagement, audit quality, Vice-Chancellor (VC) pay and VC gender are targeted for analysis.

Design/methodology/approach
This study is based on content analysis. The authors used the EU NFR Directive (2014/95/EU) to measure NFR. This includes environmental, corporate social responsibility, human rights, corporate board effectiveness and corruption and bribery. Cross-sectional data was collected from 89 HEIs worldwide across 15 different countries over three years. Content analysis, the weighted scoring method and panel data analysis are used to obtain the results.

Findings
Through a neo-institutional theoretical lens, this study provides a broader understanding of NFR content disclosure practices within HEIs. The findings reveal that the audit quality, VC pay and VC gender are significantly and positively associated with NFR content disclosure. However, board effectiveness has a significant negative impact on NFR content disclosure. More interestingly, the findings reveal that student engagement has an insignificant association with NFR content disclosure and there significant difference on the level of NFR content disclosure across universities situated in the different geographical region such as the USA, Australia, the UK and EU, Asia and Canada. The findings have important implications for regulators and policymakers. The evidence appears to be robust when controlling for possible endogeneities.

Originality/value
The study contributes to the literature on corporate non-financial disclosure as it provides new insights of corporate governance mechanisms and NFR disclosure within HEIs.
Original languageEnglish
JournalMeditari Accountancy Research
Early online date12 May 2022
DOIs
Publication statusE-pub ahead of print - 12 May 2022

Keywords

  • corporate governance
  • South Africa
  • listed companies
  • integrated reporting
  • sustainability performance
  • IR
  • IR quality
  • Johannesburg stock exchange
  • non-financial reporting
  • higher education institutions
  • neo-institutional theory
  • Ppnel data

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