Corporate governance and impression management in annual results press releases |
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| Authors: | Beatriz García Osma Encarna Guillamón-Saorín |
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| Affiliation: | 1. Department of Accounting, Universidad Autónoma de Madrid, Fco Tomás y Valiente 5, 28049 Madrid, Spain;2. Universidad Carlos III de Madrid, Spain;1. School of Business & Technology, Excelsior College, 7 Columbia Circle, Albany, NY 12203, USA;2. University of Toronto, Rotman School of Management, 105 St George Street, Toronto, Ontario, M5S 3E6, Canada;1. Ross School of Business, University of Michigan, 701 Tappan Street, Ann Arbor, MI 48109-1234, United States;2. Marshall School of Business, University of Southern California, 3670 Trousdale Parkway, Los Angeles, CA 90089-0808, United States;1. College of Business, University of Illinois at Urbana-Champaign, Champaign, IL 61820, United States;2. Isenberg School of Management, University of Massachusetts, Amherst, MA 01003, United States;1. University of Leeds, School of Earth & Environment, Woodhouse Lane, Leeds LS2 9JT, UK;2. Kedge Business School (Bordeaux), 680 Cours de la Liberation, 33405 Talence Cedex, France;3. Kedge Business School, Domaine de Luminy – BP 921, 13288 Marseille Cedex 9, France;4. Queen''s University Belfast, UK, Centre for Statistical Science and Operational Research (CenSSOR), David Bates Building, University Road, Belfast BT7 1NN, Northern Ireland, UK;1. University of Iowa, United States;2. Cornell University, United States |
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| Abstract: | We study the association between corporate governance and impression management in annual results press releases (ARPRs). Press releases constitute a timely vehicle to communicate firm performance to third parties but they can be manipulated to distort readers’ perceptions of corporate achievements. We predict that governance mechanisms actively monitor managerial disclosures, improving firm transparency and thus reducing impression management in ARPRs. The results confirm that strong governance limits impression management, consistent with governance monitoring effectively reducing self-serving disclosures by management. Our evidence suggests that management disclosure practices respond, at least partly, to informative motivations. We also show that strong governance firms are more likely to release an ARPR. |
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