Niamh Brennan

Reporting Intellectual Capital in Annual Reports: Evidence from Ireland

Examines the extent to which 11 knowledge‐based Irish listed companies are adopting methodologies for reporting of intellectual capital in their annual reports. Their market and book values were compared and a content analysis of the annual reports of the 11 listed companies was conducted. With the exception of two of the 11 listed companies, significant differences in market and book values were found, suggesting that knowledge‐based Irish listed companies have a substantial level of non‐physical, intangible, intellectual capital assets. The level of disclosure of intellectual capital attributes by the 11 listed companies studied was low.

INTELLECTUAL CAPITAL: CURRENT ISSUES AND POLICY IMPLICATIONS

Substantial differences between company book values and market values indicate the presence of assets not recognised and measured in company balance sheets. Intellectual capital assets account for a substantial proportion of this discrepancy. At present, companies are not required to report on intellectual capital assets which leaves the traditional accounting system ineffective for measuring the true impact of such intangibles. Regulations currently in place are analysed in this paper. Prior research concerning intellectual capital is next presented. Frameworks for intellectual capital are compared. Indicators used for the measurement of intellectual capital are examined. The research methodologies employed for collecting information about the use of intellectual capital accounts in companies are reviewed. Guidelines available to companies for reporting on intellectual capital are considered and also the efforts made towards developing an accounting standard for intellectual capital. Finally, current issues and policy implications of accounting for intellectual capital in the future are examined.

Impression Management and Retrospective Sense-Making in Corporate Narratives: A Social Psychology Perspective

Purpose - Prior accounting research views impression management predominantly though the lens of economics. Drawing on social psychology research, this paper seeks to provide a complementary perspective on corporate annual narrative reporting as characterised by conditions of “ Design/methodology/approach - A content analysis approach pioneered by psychology research is used, which is based on the psychological dimension of word use, to investigate the chairmens statements of 93 UK listed companies. Findings - Results suggest that firms do not use chairmens statements to create an impression at variance with an overall reading of the annual report. It was found that negative organisational outcomes prompt managers to engage in retrospective sense-making, rather than to present a public image of organisational performance inconsistent with the view internally held by management (self-presentational dissimulation). Further, managers of large firms use chairmens statements to portray an accurate (i.e. consistent with an overall reading of the annual report), albeit favourable, image of the firm and of organisational outcomes (i.e. impression management by means of enhancement). Originality/value - The approach makes it possible to investigate three complementary scenarios of managerial corporate annual reporting behaviour: self-presentational dissimulation, impression management by means of enhancement, and retrospective sense-making.

A conceptual framework of impression management: new insights from psychology, sociology and critical perspectives

In this paper we develop a conceptual framework, based on the concepts of rationality and motivation, which uses theories and empirical research from psychology/behavioural finance, sociology and critical accounting to systematise, advance and challenge research on impression management. The paper focuses on research that departs from economic concepts of impression management as opportunistic managerial discretionary disclosure behaviour resulting in reporting bias or ‘cheap talk’. Using alternative rationality assumptions, such as bounded rationality, irrationality, substantive rationality and the notion of rationality as a social construct, we conceptualise impression management in alternative ways as (1) self-serving bias, (2) symbolic management and (3) accounting rhetoric. This contributes to an enhanced understanding of impression management in a corporate reporting context.

Voluntary Disclosure of Profit Forecasts by Target Companies in Takeover Bids

This paper examines factors influencing voluntary forecast disclosure by target companies, whether good/bad news forecasts are disclosed and the influence of forecasts on the outcome of hostile bids. Disclosure was significantly more likely during contested bids. In agreed bids, probability of forecast disclosure was greater the shorter the bid horizon. In contested bids, forecasts were more likely where there were large block shareholdings, for larger targets and for targets in the capital goods industry. There was a clear tendency to disclose good news forecasts. A significant positive association between forecast disclosure and increase in offer price was found.

Rhetoric and argument in social and environmental reporting: the Dirty Laundry case

Purpose - – The purpose of this paper is to explore the interactive element in social and environmental reporting during a controversy between business organisations and a stakeholder over environmental performance. Design/methodology/approach - – The paper adopts Aristotles triangular framework of the rhetorical situation to examine how the writer, the audience, and the purpose of communication interact in the choice of rhetorical strategies used to persuade others of the validity and legitimacy of a claim during a public controversy. The analysis focuses on the strategies (i.e. moves and their rhetorical realisations) in the form of Findings - – All six firms interacting with Greenpeace in the form of press releases eventually conceded to Greenpeaces demand to eliminate hazardous chemicals from their supply chains. The paper attributes this to Greenpeaces ability to harness support from other key stakeholders and to use rhetoric effectively. Results show the extensive use of rhetoric by all parties. Originality/value - – The authors regard legitimacy construction as reliant on communication and as being achieved by organisations participating in a dialogue with stakeholders. For this purpose, the paper develops an analytical framework which situates environmental reporting in a specific rhetorical situation and links rhetoric, argument, and metaphor.

Executive Hubris: The Case of a Bank CEO

Purpose - Can personality traits of chief executive officers (CEOs) be detected at a distance? Following newspaper speculation that the banking crisis of 2008 was partly caused by CEO hubris, this paper seeks to analyse the CEO letters to shareholders of a single bank over ten years for evidence of CEO personality traits, including narcissism (a contributor to hubris), hubris, overconfidence and CEO-attribution. Following predictions that hubris increases the longer individuals occupy positions of power, the research aims to examine whether hubristic characteristics intensify over time. Design/methodology/approach - This paper takes concepts of hubris from the clinical psychology literature and applies them to discourses in CEO letters to shareholders in annual reports. The research comprises a longitudinal study of the discretionary narrative disclosures in the CEO letters to shareholders in eight annual reports, benchmarked against disclosures in the CEO letters to shareholders of the previous and subsequent CEOs of the same organisation. Findings - The results point to evidence of narcissism and hubris in the personality of the bank CEO. Over half the sentences analysed were found to contain narcissistic-speak. In 45 per cent of narcissistic-speak sentences, there were three of more symptoms of hubris – what Owen and Davison describe as extreme hubristic behaviour. In relation to CEO overconfidence, only seven sentences (2 per cent) contained bad news. More than half of the good news was attributed to the CEO and all the bad news was attributed externally. The research thus finds evidence of hubris in the CEO letters to shareholders, which became more pronounced the longer the CEO served. Research limitations/implications - The analysis of CEO discourse is highly subjective, and difficult to replicate. Originality/value - The primary contribution of this research is the adaptation of the 14 clinical symptoms of hubris from clinical psychology to the analysis of narratives in CEO letters to shareholders in annual reports to reveal signs of CEO hubris.

An exploration of the relationship between language choice in CEO letters to shareholders and corporate reputation

Abstract This paper proposes a taxonomy to assist in more clearly locating research on aspects of the association between corporate reputation and corporate accountability reporting. We illustrate how our proposed taxonomy can be applied by using it to frame our exploration of the relationship between measures of reputation and characteristics of the language choices made in CEO letters to shareholders. Using DICTION 5.0 software we analyse the content of the CEO letters of 23 high reputation US firms and 23 low reputation US firms. Our results suggest that company size and visibility each have a positive influence on the extent to which corporate reputation is associated with the language choices made in CEO letters. These results, which are anomalous when compared with those of Geppert and Lawrence (2008), highlight the need for caution when assessing claims about the effects on corporate reputation arising from the language choice in narratives in corporate annual reports.

Differentiating Clinical Governance, Clinical Management and Clinical Practice

Purpose – This paper seeks to review prior definitions of the umbrella term “clinical governance”. The research question is: do clinical governance definitions adequately distinguish between governance, management and practice functions? Three definitions are introduced to replace that umbrella term.Design/methodology/approach – Content analysis is applied to analyse 29 definitions of clinical governance from the perspective of the roles and responsibilities of those charged with governance, management and practice.Findings – The analysis indicates that definitions of the umbrella term “clinical governance” comprise a mixture of activities relating to governance, management and practice which is confusing for those expected to execute those roles.Practical implications – Consistent with concepts from corporate governance, the paper distinguishes between governance, management and practice. For effective governance, it is important that there be division of duties between governance roles and management an...

Rhetoric, Argument and Impression Management in Hostile Takeover Defence Documents

This exploratory study extends the analysis of narrative disclosures from routine reporting contexts such as annual reports and press releases to non-routine takeover documents where the financial consequences of narrative disclosures can be substantial. Rhetoric and argument in the form of impression management techniques in narrative disclosures are examined. Prior thematic content analysis methods for analysing good and bad news disclosures are adapted to the attacking and defensive themes in the defence documents of target companies subject to hostile takeover bids. The paper examines the incidence, extent and implications of impression management in ten hostile takeover defence documents issued by target companies listed on the London Stock Exchange between 1 January 2006 and 30 June 2008. Three impression management strategies – thematic, visual and rhetorical manipulation – are investigated using content analysis methodologies. The findings of the research indicate that thematic, visual and rhetorical manipulation is evident in hostile takeover defence documents. Attacking and defensive sentences were found to comprise the majority of the defence documents analysed. Such sentences exhibited varying degrees of visual and rhetorical emphasis, which served to award greater or lesser degrees of prominence to the information conveyed by target company management. While exploratory in nature, this paper concludes with suggestions for future more systematic research allowing for greater generalisations from the findings.