Black economic empowerment disclosures by South African listed corporations: The influence of ownership and board characteristics

Abstract

This study investigates the extent to which South African (SA) listed corporations voluntarily disclose information on black economic empowerment (BEE) in their annual and sustainability reports and examines the possible motivations and resulting ownership and board factors influencing BEE disclosure behaviour. Using a sample of 75 listed corporations from 2003 to 2009 and a content analysis of BEE disclosures, our results suggest that the extent of BEE disclosures (word count) varies substantially among the sampled companies, but the disclosures have generally improved over the seven-year period. We also find that block ownership and institutional ownership are negatively associated with the extent of BEE disclosures, whereas government ownership, board diversity, board size and the percentage of non-executive directors are positively related to the extent of BEE disclosures. Our results are robust when controlling for conventional firm-level characteristics, such as cross-listing, firm size, profitability, gearing, growth and industry, as well as alternative disclosure proxies. We demonstrate that our results are consistent with agency, legitimacy, resource dependence and stakeholder theoretical predictions.

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Identifiers

ORCID for Collins G. Ntim: orcid.org/0000-0002-1042-4056

ORCID for Teerooven Soobaroyen: orcid.org/0000-0002-3340-1666

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