Annual report disclosures in UK universities: the influence of governing boards

Soobaroyen, Teerooven, Broad, M.J and Ntim, Collins G. (2014) Annual report disclosures in UK universities: the influence of governing boards. 2014 EFMD Higher Education Research Conference, Stockholm University.

Abstract

The international higher educational institutions (HEIs) environment has experienced rapid changes and/or reforms over the past decades. Specifically, the HE sector has been characterised by increasing student numbers, declining government funding, but tighter external regulation, increasing competition, and greater accountability through increased ‘managerialism’, ‘commoditisation’, ‘commercialisation’ and ‘corporatisation’ of academics and HEIs. These changes have brought to the core the issue of sound financial management through good internal governance, increased public accountability and transparency, and stronger performance within HEIs. This paper, therefore, investigates why and how HEIs internal governance structures might influence their voluntary public accountability and transparency disclosures (PADs). Using a 2012 cross-sectional sample of 130 UK HEIs, we find that audit committee quality, governing board diversity, independent or lay governors, and the presence of a corporate governance committee impact positively in PADs. By contrast, we do not find any evidence that audit firm size, governing board size, and the frequency of governing board meetings have any significant effect on PADs. The central tenor of our findings remains unchanged across a number of econometric models that sufficiently account for different kinds of endogeneities, as well as alternative internal governance mechanisms and PADs measures. Our results are generally in line with the predictions of our multi-theoretical framework that incorporates insights from agency, institutional, legitimacy, public accountability/stewardship, resources dependence, and stakeholder theories

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Contributors

Author: Teerooven Soobaroyen

Author: Collins G. Ntim

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