Victoria Wise

Corporate governance and quality of forward-looking information: Evidence from the Chinese stock market

Purpose - – The purpose of this paper is to investigate the association between corporate governance mechanisms and quality of forward-looking information in the Chinese stock market which presents a mandatory disclosure environment for forward-looking information. Design/methodology/approach - – Using sales forecasts to proxy forward-looking information and using precision and accuracy to measure the quality of information disclosure, the authors investigate the impact of corporate governance attributes on the precision and accuracy of sales forecasts made by listed Chinese firms in their 2010 annual reports, using logistics and ordinary least squares regressions. Findings - – The authors find good corporate governance has a positive and significant impact on the precision choice of sales forecasts disclosure. Firms with good corporate governance are more likely to disclose more precise sales forecasts than providing qualitative discussions on firms’ sales trend. In addition, good corporate governed firms are found more likely to provide precise non-financial information. The authors also find that good corporate governance is positively associated with making more conservative sales forecasts disclosure. However, the authors find no significant relationship between good corporate governance and smaller forecast error. Research limitations/implications - – The study makes significant contributions to corporate disclosure literature. The authors investigate the determinants of the quality of forward-looking information in a mandatory disclosure regime while most forward-looking information disclosure literature have been conducted in a voluntary-based disclosure environment. The authors examine whether in a mandatory disclosure regime, corporate governance mechanisms can play a positive role in precision choices and accuracy of forward-looking information. Further, the study is the first to examine corporate governance and the quality of non-financial forward-looking information (sales target and production goal). The research findings therefore extend forward-looking information disclosure research from financial information to non-financial information. Practical implications - – The empirical findings will provide regulators with evidence on the quality of forward-looking information in a mandatory disclosure regime and the influence of corporate governance on forward-looking disclosure. The properties of forward-looking information disclosure in China should be of interest to policy makers, investors and financial analysts in other international jurisdictions. Originality/value - – The study investigates forward-looking information in a mandatory disclosure regime while most extant forward-looking information studies have been conducted in a voluntary disclosure environment. The study is the first to examine the quality of non-financial forward-looking information such as operational goals and plans, and to investigate the association between the quality of non-financial forward-looking information and corporate governance mechanisms. The research findings extend forward-looking information disclosure research from quantitative financial information to quantitative non-financial information.

Infrastructure reporting by New Zealand local authorities – perceptions and expectations

Purpose - The purpose of this paper is to identify the contextual factors affecting infrastructure reporting by New Zealand local authorities. Design/methodology/approach - The paper includes a survey and interview of Annual Report Recipients (ARRs) and Infrastructure Information Preparers (IIPs), together with an assessment of the extent of infrastructure information disclosure in the annual reports of New Zealand local authorities. Findings - This study finds that contrary to the expectations of Luder’s contingency model ( Originality/value - The paper contributes towards theoretical development by adopting Luder’s (

Conceptual framework for earnings management and corporate governance research

This study investigates the theoretical framework for earnings management and corporate governance research along with a focused review of relevant previous research that has investigated the effects of a variety of corporate governance factors and earnings management. Research background has been categorised using Australian corporate governance principles and recommendations issued in August 2007.

Regulation and CO2 mitigation efforts in the transport industry

It has been observed that environmental concerns at both individual and corporate levels are vital in shaping corporate environmental efforts. The rate and extent of firms’ responses to environmental issues are in part determined by the existence or introduction of regulation. In this study, the impact of regulatory uncertainty and how it is managed are identified and examined. Our paper analyses a survey of 105 Australian transport firms. The results tend to confirm the high degree of regulatory uncertainty in the Australian transport industry. Further, these data indicate that managers of transport companies utilise a wide range of actions to cope with this uncertainty. The findings suggest that the higher the level of uncertainty, the broader the range of measures that managers will apply to cope, and the more actively managers will manoeuvre to deal with the uncertainty.

Impact of climate change issues on businesses: an action plan using a corporate governance approach

Business globally are readying themselves for wide-ranging impacts as they transition towards a low-carbon footprint economy. This paper discusses the major impacts for the firm due to the move to a low-carbon footprint system. In doing so it highlights the crucial link between opportunities, costs, risks and structural changes faced by firms, and presents a framework for managing the complex, multi-pronged impacts. The paper provides a conceptual model that will assist decision-makers to deal with risk management or bottom-line protection issues as well as exploiting the business opportunity the new regulatory environment will produce. The model argues for a holistic corporate governance mechanism, with responsibility and accountability of climate change risk management placed with the board of directors and senior management.

Modelling the complex factors driving CO2 emission reduction efforts

Chapman (2007) observes that transport accounts for 26% of global CO2 emissions and it is one of the few industrial sectors where emissions are still growing and are expected to add to environmental degradation. Although generic motivating factors identified in the literature have contributed somewhat to knowledge, there is a need to develop a clearer understanding of the motivations driving corporate environmental practices especially CO2 emission mitigation practices. The motivating factors identified from the literature include: energy and implementation cost; operational efficiency; global climate protection; social responsibility; customer, competitor, regulatory and stakeholder pressure; corporate strategic direction; reputation enhancement; and, the opportunity for new sources of capital. This paper considers Weinhofer and Hoffmann’s (2010) conceptual model that explains motivations for climate change mitigation action; and a further conceptual model which explains the influences, motivations and c...

Regulatory challenges in the move to a low~carbon environment

An outcome of the international climate conference in Copenhagen (COP15, 2009) was that a number of governments have undertaken to reduce their nations greenhouse gas (GHG) emissions and some have provided targets and deadlines for the achievement of their stated goals. While the transition to a low-carbon environment has the potential to stimulate growth, create jobs and opportunities, and to bring benefits to the economy, there are many challenges in the process. This is an exploratory paper aimed at identifying the major regulatory and governance issues associated with the move to a low-carbon environment. In terms of business governance, CEOs and other executives responsible for corporate oversight will need to monitor, assess, and manage compliance with climate change and carbon-related regulation. In the transition period government regulation encouraging appropriate carbon costs classification and measurement, financial sustainability reporting and disclosure, and responsible carbon citizenship are expected to be predominant.

Behavioural finance theory: implications for retirement savings

This paper contains an overview of the life-cycle model and the behavioural finance theories that assist in explaining why individual savings behaviour deviates from what is predicted by this model. According to Bernstein (1996), the behavioural research evidence suggests irrationality, inconsistency and incompetence in the way individuals approach and arrive at decisions and choices when faced with uncertainty. The review of literature undertaken in this paper confirms that numerous individuals are not adequately equipped to handle the complex decisions required to properly plan and save for their retirement. While the targeting of educational resources to those individuals who are prepared to actively engage in the management of their retirement funds is likely to be beneficial, there is a need for behavioural factors to underpin future retirement savings policies.