Agency and institutional-related factors and the heterogeneity of sustainability and integrated report information disclosures in Kenya

Injeni, Geoffrey; Mangena, Musa; Mathuva, David; Mudida, Robert

Abstract

Purpose: This paper aims to examine the factors influencing the level of disclosures of sustainability (SR) and integrated report (IR) information in a developing country context, with particular reference to Kenya. Design/methodology/approach: The study uses a panel data set of 419 firm-year observations of listed companies in Kenya covering the period 2010 through 2018. Data are collected from the annual reports and analysed using a generalized estimations equation model. Findings: The results reveal that there is momentum towards newer reporting frameworks in Kenya with substantial IR and SR disclosures in their annual reports. The results also show that level of SR and IR disclosures is influenced by both agency-related factors (board gender diversity, audit committee independence, block ownership and the presence of foreign ownership). Additionally, institutional-related factors (regulatory pressure and promotional efforts of regulatory and professional bodies [reporting excellence awards]) influence the disclosures. Practical implications: The results highlight that initiatives such as those led by the regulatory and professional bodies in Kenya are effective in motivating companies to enhance disclosures. Thus, regulators and professional bodies might need to continue and even intensify their efforts. These results have implications for further research as they show that SR and IR disclosures are influenced by similar factors. Social implications: The study has the potential to contribute to the ongoing initiatives and discussions on the adoption of IR by firms in Africa as spearheaded by the African Integrated Reporting Council. Originality/value: To the best of the knowledge, the study is, perhaps, the first to examine both SR and IR disclosures at the same study allowing comparison of the extent and drivers of the two disclosures. Moreover, examining the institutional-related factors in a single country has not been done in prior literature, and so this is an innovation.

Citation

Injeni, G., Mangena, M., Mathuva, D., & Mudida, R. (2021). Agency and institutional-related factors and the heterogeneity of sustainability and integrated report information disclosures in Kenya. Journal of Financial Reporting and Accounting, 20(5), 809-840. https://doi.org/10.1108/JFRA-10-2020-0305

• Journal Article Type: Article
• Acceptance Date: Jun 10, 2021
• Online Publication Date: Aug 11, 2021
• Publication Date: Aug 11, 2021
• Deposit Date: Jun 17, 2021
• Publicly Available Date: Aug 11, 2021
• Journal: Journal of Financial Reporting and Accounting
• Print ISSN: 1985-2517
• Electronic ISSN: 2042-5856
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 20
• Issue: 5
• Pages: 809-840
• DOI: https://doi.org/10.1108/JFRA-10-2020-0305
• Keywords: Corporate Reporting; sustainability reporting; integrated reporting; agency theory; Institutional theory
• Public URL: https://nottingham-repository.worktribe.com/output/5689840
• Publisher URL: https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2020-0305/full/html