BOARD CONFIGURATION AND IR ADOPTION. EMPIRICAL EVIDENCE FROM EUROPEAN COMPANIES

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Abstract

Over the last few years, companies are increasingly international, and a growing number of stakeholders is affected by the sustainability aspects of business, resulting in significant changes in how corporate information is both perceived and published. This scenario has led to many company Boards of Directors (BoD) voluntarily adopting a new communication tool, known as Integrated Reporting, (IR) which is a single disclosure document that satisfies stakeholders’ increasing need for information. This study wants to contribute to existing literature on the relationship between corporate governance and IR, investigating if board configuration (size, gender, and average age) influences its adoption. The analysis relies on a sample of 1,047 companies from 18 European countries for the year 2015. These results show a positive relationship between the decision to adopt IR and board size and female board members, whereas the older board members have a negative effect on it. Our findings present implications both from the theoretical and practical point of view. On a theoretical level, the research confirms that board diversity needs to be analysed more in detail, because of its contribution to company’s transparency. Moreover, the results provide to standard setters and regulators a useful insight of the important distinction among various board members’ features.

Keywords: Disclosure, Integrated Reporting, Corporate Governance, Board Composition

Received: 26.09.2017

Accepted: 04.12.2017

How to cite this paper: Alfiero, S., Cane, M., Doronzo, R., & Esposito, A. (2017). Board configuration and IR adoption. Empirical evidence from European companies. Corporate Ownership & Control, 15(1-2), 444-458. https://doi.org/10.22495/cocv15i1c2p13