Artificial intelligence activities and ethical approaches in leading listed companies in the European Union

This study explores the information regarding Artificial Intelligence (AI) included by European listed companies in their annual and/or sustainability reports. The study mainly focuses on (1) the development and use of AI systems/projects reported by companies, (2) the extent to which companies disclose ethical principles or guidelines regarding AI and (3) the factors explaining these practices.The study analyses the reports of 200 companies listed in the major indexes of Germany, Sweden, Finland, France, Spain, and Italy, both from qualitative and quantitative perspectives. All reports are analysed, using content analysis methodology, to identify expressions such as ‘artificial intelligence’, ‘machine learning’, ‘deep learning’, and ‘big data’, and then classified accordingly. The study’s findings suggest a growing interest in the above-mentioned technologies, although 41.5% of companies do not report any activity in the field of AI. The adoption of ethical approaches to AI is at a very preliminary stage, and<5% of companies report on that issue. The quantitative analysis shows that larger companies, companies in the Technology and Telecommunications industries, and companies based in Southern countries are more likely to disclose information on AI activity. The majority of companies that develop ethical principles are listed in the Northern region and belong to the Technology and Telecommunications industries.The study provides evidence of AI disclosure, a type of non-financial disclosure that has not been explored yet in the literature. Unlike existing studies, we propose a first definition of the topic and a taxonomy that can be used in further research on AI disclosure and can contribute to the development of KPIs in the field. Furthermore, this study provides a theoretical framework integrating some traditional theories, such as Voluntary disclosure theory, Signalling theory, and Legitimacy theory, specifically drawn to interpret AI disclosure practices, which can help with a further in-depth exploration of AI disclosure combining concurrent perspectives. The study’s results may serve as a starting point for researchers and companies interested in the topic.     

A Survey of Sustainability Reporting Practices of Australian Reporting Entities

This study examines the nature and extent of sustainability reporting practices in the various reporting media used by companies listed on the ASX (annual reports, discrete reports and websites). The sustainability reporting practices of the sample are compared with key indicators outlined in the GRI framework. The annual report is found to be the least valuable source of information on corporate sustainability in terms of the number of indicators observed and the diversity of the information provided. The discrete reports and websites provide greater levels of information on sustainability; however the overall levels of disclosure are generally low.     

Sentimental Sustainability: Does What Companies Say Tell More Than What Companies Do?

Based on a sample of more than eleven thousand unique 10-K reports of US companies filed with SEC in period 2013 to 2018, this study examines the relationship between actual sustainability performance of companies, evaluated by MSCI ESG performance scores, and the extent and the scope of environmental, social, and governance information disclosure in their annual reports. The study shows empirical evidence supporting the signalling theory view of voluntary disclosure of ESG information in annual reports for most industries, while environmentally unfriendly companies belonging to the Mining industry division show excessive reporting behavior favoring environmental topics, which is consistent with incentives to improve public image and mitigate social, political, and legal risks in line with the legitimacy theory of information disclosure. When differentiating between forward-looking and non-forward-looking ESG statements, the study shows that companies providing more forward-looking ESG information in annual reports show better next-year ESG performance. This study implements established content analysis techniques with focus on ESG reporting and performance, building up on the study of Baier, Berninger, and Kiesel (2020) that proposed an ESG-tailored dictionary for textual analysis purposes.     

Women on boards and greenhouse gas emission disclosures

We apply institutional and board capital theory to examine whether women on boards are associated with disclosure and quality of corporate greenhouse gas (GHG) emissions related reporting. We examine the research problem in Australia in a period when no requirements existed for listed companies to appoint female directors or to report GHG emissions. This environment allows us to examine the association between women on boards and GHG emissions related disclosure in annual and sustainability reports in a voluntary setting. We find that companies with multiple female directors make GHG emissions related disclosures that are of higher quality.     

A CEO with many messages: Comparing the ideological representations provided by different corporate reports

This study analyzes how corporate reporting can be used to reinforce particular worldviews in the ongoing discursive debate over sustainability. The use of language is compared in CEO letters from two types of disclosures: the annual and sustainability reports of two Finnish companies during 2000–2009. The analysis is based on Thompson's (1990) schema regarding the modes of ideology. Significant differences are noted; the CEO letters in the annual reports prominently use the economic discourse of growth and profitability, but they rely on the ‘well-being’ discourse in the sustainability reports. Despite the difference in discourse, by using different forms of ideological strategies, both types of disclosure serve the dominant social paradigm. The findings presented in this study highlight the need to further develop corporate sustainability reporting practices.     

Corporate Climate Change‐Related Governance Practices and Related Disclosures: Evidence from Australia

This paper investigates the climate change‐related corporate governance disclosure practices of five major Australian energy‐intensive companies over a 16‐year period. In doing so, a content analysis instrument is developed to identify disclosures made in relation to various policies and procedures the organisations have in place for addressing the issues associated with climate change. This instrument is applied to the respective companies’ annual reports and sustainability reports. An increasing trend is found in companies’ climate change‐related corporate governance disclosures over time; however, in many instances the disclosures provide limited insights into the climate change‐related risks and opportunities confronting the sample companies.     

Demand for,and impediments to,the disclosure of information about climate change-related corporate governance practices

Based on a survey of climate change experts in different stakeholder groups and interviews with corporate climate change managers, this study provides insights into the gap between what information stakeholders expect, and what Australian corporations disclose. This paper focuses on annual reports and sustainability reports with specific reference to the disclosure of climate change-related corporate governance practices. The findings culminate in the refinement of a best practice index for the disclosure of climate change-related corporate governance practises. Interview results indicate that the low levels of disclosures made by Australian companies may be due to a number of factors. A lack of proactive stakeholder engagement and an apparent preoccupation with financial performance and advancing shareholders interest, coupled with a failure by managers to accept accountability, seems to go a long way to explaining low levels of disclosure.     

企业业绩组合业绩差异与季报披露的时间选择--管理层信息披露的组合动机与信息操作

本文主要考察企业业绩组合、业绩差异与季报披露的时间选择之间的关系以及季报披露时间的信息内涵。实证研究显示,上年年报和一季度季报均为“好消息”,一季度每股收益、净资产收益率和主营业务利润率高的上市公司季报披露时间间隔大;上年年报为“好消息”而一季度季报为“坏消息”,上年年报为“坏消息”而一季度季报为“好消息”,上年年报和一季度季报均为“坏消息”,一季度每股收益比上年度高的上市公司季报披露时间间隔小。这可能是由于一季度季报和上年年报均要求在4月30日之前披露的特殊性,上市公司管理层在信息披露的过程中可能存在组合动机与信息操作行为,一季度季报披露的时间选择可能关键取决于上年年报和一季度季报披露的“好消息”或“坏消息”带来的积极影响或消极影响的组合与权衡。     

DISCLOSURE IN JAPANESE CORPORATE ANNUAL REPORTS

This paper reports the results of a survey of disclosure in the annual reports of unlisted and listed corporations in Japan, a country that many argue has a unique environment. The paper attempts to investigate differences between companies in the extent of disclosure in their Commercial Code (CC) and Securities and Exchange Law (SEL) accounts respectively. The survey finds that there is a significant difference in disclosure by multiple listed companies in their CC accounts compared with domestically listed corporations and unlisted enterprises. It is also found that there is a significant difference in disclosure between multiple listed and domestically listed entities in their SEL accounts. However, there was no significant difference in disclosure between the TSE (Tokyo Stock Exchange) group and the unlisted group in their CC accounts.     

The impact of the UK's Modern Slavery Act (2015) on the disclosure of FTSE 100 companies

This paper explores the impact of the UK's Modern Slavery Act (2015) on the disclosure of the FTSE100 companies. It conducts a content analysis of modern slavery disclosures in the modern slavery statements, annual reports, and sustainability reports from 2013 to 2019. By utilising the framework by the Business & Human Rights Resource Centre, Practical Guidance by the Home Office and the Global Reporting Initiative, we assess the extent and quality of modern slavery disclosures. Our analysis reveals a high level of compliance to the Act's minimum disclosure requirements. We also note an increase in the extent and quality of disclosures following the introduction of the Act, although quality remains low throughout the period as symbolic disclosure is predominantly in evidence. Drawing on normativity theory we identify intrinsic and contextual conditions for norm development. We find that while the presence of intrinsic conditions has positively contributed to the extent and quality of some disclosure themes, the lack of controllability and communication with suppliers has undermined related disclosure provision and constitutes a major hurdle for improving accountability in supply chains.     

VOLUNTARY DISCLOSURES IN AN EMERGING CAPITAL MARKET: SOME EVIDENCE FROM THE ATHENS STOCK EXCHANGE

Prior research has pointed to the need to subdivide aspects of voluntary disclosure rather than treat this as an amorphous mix. However, questions about the relative reasons for the variations observed across categories of voluntary disclosure remain open to investigation. This paper contributes to that investigation in the context of a European emerging capital market. Three categories of voluntary disclosure are developed (namely, corporate environment, social responsibility and finance-related disclosures) and each category is tested for association with seven company-specific variables (corporate size, gearing, profitability, liquidity, industry, share return and listing status) in the annual reports of 87 companies listed on the Athens Stock Exchange (ASE). The extent of voluntary disclosure is relatively low. Using linear regression analysis, different explanations are found for the separate categories of disclosure based on prior evidence. Interpretation and analysis are offered in the context of the operation of the ASE.     

Evaluating the Effectiveness of Sustainability Disclosure: Findings from a Recent SASB Study

Early research into the relationship between corporate sustainability programs and financial performance suggests a positive relationship between strong sustainability performance and a lower cost of capital. As investors increasingly incorporate sustainability information into financial decisionmaking, the importance of high‐quality sustainability disclosure is growing. Just as investors have relied on financial disclosures based on generally accepted accounting principles (GAAP) to assess corporate risk, a market standard is needed to help companies disclose comparable sustainability information. To address this issue, the Sustainability Accounting Standards Board (SASB) conducted a recent analysis of the current state of sustainability disclosure in annual Securities and Exchange Commission (SEC) filings. The study reviewed the disclosures of over 700 U.S.‐and foreign‐domiciled companies, focusing on material sustainability topics as identified by SASB's industry‐specific accounting standards. The authors find large variations among different corporate sectors in the frequency and quality, as well as the focus, of their sustainability disclosures. Then, after examining in detail disclosures within the SASB Resource Transformation and Consumer Staples sectors, the authors suggest a number of possible drivers of this variation, including key sustainability and economic trends, while also presenting evidence of increasing investor interest in sustainability information. Although the authors' analysis was not intended to determine the extent to which the quality of sustainability disclosure affects investor returns, the findings provide a useful baseline for the as yet largely unexplored relationship between sustainability disclosure and corporate financial performance.     

及时披露能抑制信息泄露吗?

以深交所2007-2009年披露年报的A股上市公司为样本,本文实证研究了我国上市公司信息披露的及时性对抑制信息泄露与内幕交易的现实效果。研究表明,年报披露及时性逐年提高,披露及时性与信息泄露程度显著负相关,及时披露对抑制信息泄露具显著效用;信息质量与及时性在抑制信息泄露方面具协同作用;与信息质量较好的公司比较,信息质量较差的公司因及时披露对信息泄露的抑制效果更显著,表明及时披露在抑制信息泄露方面对信息质量具替补作用。     

An analysis of the companies’ compliance with the EU disclosure requirements and corporate characteristics influencing it: A case study of Turkey

One of the factors shaping accounting disclosure of countries in Europe is the EU Fourth Directive (EUFD) which addresses individual company accounts. The EUFD has been claimed to have had an impact on accounting, including accounting disclosure, of not only the EU countries but also non-EU member European countries. Turkey is one of the non-EU member European countries claimed to be influenced by the EUFD and this study examined Turkish companies’ level of compliance with the disclosure requirements of the EUFD over the years (1986, 1987, 1991, 1992 and 1995), and assessed whether companies’ level of compliance had been influenced by their corporate characteristics, such as company size, listing status and industry type.Turkish companies’ level of compliance with the disclosure requirements of the EUFD was measured by an index (i.e. EUFD Disclosure Compliance Index—EUFDCDI). The index was developed by; constructing disclosure scoring sheet; obtaining annual reports of 61 sampled Turkish companies over the years; completing scoring sheet for each companies’ annual report; and creating disclosure index. The index (EUFDCDI) scores was, than, analysed for each year to assess the companies’ compliance with the EU disclosure requirements and both parametric and non-parametric test, were conducted to determine if there were significant changes in the extent of disclosure in compliance with the EUFD over the years. Furthermore, using the companies EUFDCDI score as dependent variable and corporate characteristics as independent variables, the Ordinary Least Square regression was run for each year to find out if the companies’ level of compliance with the EU disclosure requirements were influenced by their corporate characteristics.The results of this study revealed that Turkish companies’ compliance with the required disclosure by the EUFD varied within the range of 30–85%, but their compliance increased significantly from one year to another throughout the selected period. The results further revealed that listing status is one of the important corporate characteristics of the Turkish companies affecting their compliance with the EU disclosure requirements.     

Disclosure in the Corporate Annual Reports of Swedish Companies

Sweden is of interest because of the rapid growth in the Stockholm stock exchange and because of the country's disproportionate number of multinational enterprises. This paper reports on the extent of disclosure in the corporate annual reports of Swedish companies. An assessment is made as to whether there is a significant association between a number of independent variables and the extent of disclosure.     

Determinants and features of voluntary disclosure in the Chinese stock market

This paper offers in-depth analysis of the determinants and features of voluntary disclosure based on information in the annual reports of 1066 Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges. This extensive sample represents about 80% of all public companies in China. Our findings suggest that voluntary disclosure in China is positively related to firm size, leverage, assets-in-place, and return on equity and is negatively related to auditor type and the level of maturity or sophistication of the intermediary and legal environments. We also find some evidence to suggest a quadratic convex association between state ownership and voluntary disclosure. However, our analysis provides no evidence that extensive disclosure benefits public companies in China in the form of a lower cost of equity.     

Corporate Financial Reporting in Nigeria

This paper reports on the extent of financial reporting by a sample of publicly quoted companies in Nigeria. Rather than examine the disclosure of specific items of information, the paper deals with the entire contents of the corporate annual report and highlights its different parts. The index of disclosure methodology is used to describe the trend of reporting practices between 1982 and 1986.     

Determinants and consequences of voluntary disclosure in an emerging market: Evidence from China

In this paper we examine empirically the determinants of voluntary disclosure in the annual reports of Chinese listed firms that issue both domestic and foreign shares and determine if the cost of debt capital is related to the extent of voluntary disclosure. We find the level of voluntary disclosure is positively related to the proportion of state ownership, foreign ownership, firm performance measured by return on equity, and reputation of the engaged auditor. There is no evidence, however, that companies benefit from extensive voluntary disclosure by having a lower cost of debt capital.     

Signaling strategies in annual reports: Evidence from the disclosure of performance indicators

In voluntary annual report communication, empirical results of signaling theory are contrasting, mainly owing to problems in disclosure measurements. We focus on a specific piece of incremental information and study the signaling strategies in annual reports by analyzing the disclosure of performance indicators that provide incremental information. In this paper, we scrutinize the business review of a sample of 120 listed Italian companies for fiscal year 2010. After controlling for size, risk, and industry, our analysis confirms that the number of indicators published is positively related to firm profitability. Our results help clarify the signaling strategies in annual report communication. Operatively, our evidence can help regulators and standard setters to better discipline the communication of relevant and private information in annual reports, particularly performance indicators.     

Shareholder Requirements for Compulsory Environmental Information in Annual Reports and on Websites

Growing general concern regarding the natural environment may cause shareholders to require more accountability for environmental issues from the companies in which they invest. We do a survey of shareholders in three major Anglophone countries (Australia, the United Kingdom, and the United States) to determine whether they require compulsory environmental disclosure and where they would prefer companies to disclose such information. In all three countries, shareholders prefer compulsory environmental disclosure in annual reports (preferably in a separate section addressing the issue), as well as disclosure on websites, whereas separate environmental reports are less popular as a disclosure medium. Overall, legislation is preferred as a method to mandate environmental disclosure, with accounting standards more popular among American shareholders. The implication is that regulators may have to reconsider their current stance regarding corporate environmental disclosure.