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Beyond narrative disclosure tone: The upper echelons theory perspective

Bassyouny, Hesham; Abdelfattah, Tarek; Tal, Lei


Hesham Bassyouny

Lei Tal


This study investigates the key drives of narrative tone in the UK context where managers have more flexibility to frame narratives with stakeholders. While prior studies examined firm-specific characteristics as determinants of narrative tone, the current study employs the upper echelons theory and focusses on top managers’ characteristics. Using computerised textual analysis, our findings suggest that both observed and unobserved CEOs characteristics drive positive tone in the UK context and this relationship is moderated by corporate governance attributes. Specifically, older, female and financial expert CEOs display less positive tone. Considering psychological features, we find that narcissistic CEOs are more likely to display positive tone compared with non-narcissistic CEOs, however, this relationship declines in firms that have a higher independent board. Moreover, we found audit committee and board independence are negatively associated with positive tone. Additionally, we found more females on board increases the negative relationship between female CEOs and positive tone. These results have significant implications for top management, policy makers, regulators and the users of financial reporting.


Bassyouny, H., Abdelfattah, T., & Tal, L. (2020). Beyond narrative disclosure tone: The upper echelons theory perspective. International Review of Financial Analysis, 70, Article 101499.

Journal Article Type Article
Acceptance Date Apr 24, 2020
Online Publication Date May 16, 2020
Publication Date 2020-07
Deposit Date Nov 14, 2022
Publicly Available Date Nov 23, 2022
Journal International Review of Financial Analysis
Print ISSN 1057-5219
Electronic ISSN 1873-8079
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 70
Article Number 101499
Keywords Economics and Econometrics; Finance
Public URL
Publisher URL


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