Dose board characteristics influence integrated reporting quality? Empirical evidence from an emerging market

Figures & data

Table 1. Distribution of sample firms by sector and by year

NO	Sector	2017	2018	2019	2020	Total	%
1	Construction	0	1	2	2	5	2.89%
2	Energy	0	0	3	3	6	3.47%
3	Financial Services	4	4	7	8	23	13.29%
4	Health Care	2	2	2	3	9	5.20%
5	Industrial Products & Services	2	5	4	5	16	9.25%
6	Plantation	1	2	5	5	13	7.51%
7	Property	0	1	5	7	13	7.51%
8	Real Estate Investment Trusts	1	2	2	2	7	4.05%
9	Technology	0	1	3	3	7	4.05%
10	Telecommunications & Media	3	6	6	6	21	12.14%
11	Transportation & Logistics	1	3	8	8	20	11.56%
12	Utilities	2	2	2	2	8	4.62%
13	Consumer Products & Services	5	5	6	9	25	14.45%
Total		21	34	55	63	173	100.%

Table 2. Variables description and measurement

Variables	Acronym	Measurement
Board Characteristics Variables
Board Size	BSZ	Total number of board members
Board Independence	BIND	Total number of independent directors on the board divided by total number of the board
Board Financial Expertise	BEX	Total number of board members with qualifications in accounting or finance, including those who are members of accounting professional bodies.
Board Gender Diversity	BGN	Total number of women on the board
Board Meetings	BMEE	Total number of board meetings in a fiscal year.
Control Variables
Return on Assets	ROA	Net income divided by total assets.
Return on Equity	ROE	Net income divided by shareholders’ equity
Firm Size	FSZ	Book value of total assets
Firm Age	FAG	Number of years from the time the firm was incorporated
Leverage	LEV	Debt/book value of total assets
Industry	-	Dummies for each of the thirteen industries
Year	-	Dummies for the years 2017–2020, inclusive

Table 3. Descriptive statistics for IRQ

Year	N	Mean	Std. Deviation	95% Confidence Interval		Minimum		Maximum
				Lower Bound	Upper Bound
2017	21	51.7619	3.41913	50.2055	53.3183	42.00		56.00
2018	34	53.6176	4.20688	52.1498	55.0855	39.00		59.00
2019	55	54.1273	4.67877	52.8624	55.3921	39.00		59.00
2020	63	55.8571	4.40255	54.7484	56.9659	40.00		60.00
Total	173

Table 4. Descriptive statistics for IRQ by sector

NO	Sector	N	Mean	Std. Deviation	95% Confidence Interval for Mean		Minimum	Maximum
					Lower Bound	Upper Bound
1	Construction	5	52.8000	2.94958	49.1376	56.4624	48.00	55.00
2	Energy	6	52.0000	6.89928	44.7597	59.2403	40.00	58.00
3	Financial Services	23	55.6087	2.14771	54.6800	56.5374	52.00	59.00
4	Health Care	9	55.6667	3.12250	53.2665	58.0668	50.00	59.00
5	Industrial Products & Services	16	56.2222	2.46280	54.9975	57.4469	51.00	60.00
6	Plantation	13	55.0000	3.09839	52.9185	57.0815	49.00	60.00
7	Property	13	55.5385	2.69615	53.9092	57.1677	49.00	59.00
8	Real Estate Investment Trusts	7	54.2857	2.81154	51.6855	56.8860	50.00	59.00
9	Technology	7	50.1429	6.44020	44.1867	56.0990	39.00	57.00
10	Telecommunications & Media	21	53.0000	5.59464	50.4534	55.5466	39.00	59.00
11	Transportation & Logistics	20	54.5000	5.38516	51.9797	57.0203	43.00	60.00
12	Utilities	8	56.2500	3.01188	53.7320	58.7680	51.00	60.00
13	Consumer Products & Services	25	53.0800	5.83038	50.6733	55.4867	40.00	59.00
Total		173

Table 5. Descriptive statistics for all variables

Variable	Obs	Mean	Median	min	max	std. Dev.
IRQ	173	54.37	56	39.000	60	4.515
BSZ	173	8.197	8	3	13	2.101
BIND	173	.577	.571	.375	.833	.118
BEX	173	3.202	3	1	7	1.402
BGN	173	2.364	2	0	6	1.062
BMEE	173	9.035	8	4	26	4.352
ROA	173	6.012	4.31	−20.67	32.74	7.874
ROE	173	15.485	8.47	−15.08	100.35	26.12
FSZ	173	16.283	16.213	12.425	20.568	1.64
FAG	173	42.092	36	6	173	26.491
LEV	173	.27	.26	0	.925	.192

Note: IRQ = integrated reporting quality, BSZ = Board Size, BIND = Board Independence, BEX = Board Financial Expertise, BGN = Board Gender Diversity, BMEE = Board Meetings, ROA = Return on assets, ROE = Return on equity, FSZ = Firm size, FAG = Firm Age, LEV = Leverage

Table 6. Pearson Correlation

Variables	−1	−2	−3	−4	−5	−6	−7	−8	−9	−10	−11
(1) IRQ	1.000
(2) BSZ	0.221	1.000
(3) BIND	0.095	−0.124	1.000
(4) BEX	0.195	0.478	0.179	1.000
(5) BGN	0.238	0.405	0.054	0.29	1.000
(6) BMEE	0.302	0.325	0.304	0.317	0.281	1.000
(7) ROA	−0.279	−0.1	−0.206	−0.219	0.04	−0.377	1.000
(8) ROE	−0.299	−0.125	−0.177	−0.159	0.057	−0.247	0.83	1.000
(9) FSZ	0.352	0.379	0.225	0.419	0.239	0.549	−0.379	−0.294	1.000
(10) FAG	−0.126	0.146	0.04	0.127	0.12	0.009	0.204	0.226	−0.076	1.000
(11) LEV	0.121	−0.038	−0.062	0.058	−0.035	0.157	−0.231	0.008	0.139	−0.142	1.000

Note: IRQ = integrated reporting quality, BSZ = Board Size, BIND = Board Independence, BEX = Board Financial Expertise, BGN = Board Gender Diversity, BMEE = Board Meetings, ROA = Return on assets, ROE = Return on equity, FSZ = Firm size, FAG = Firm Age, LEV = Leverage

Table 7. Regression results regression analysis using Prais–Winsten (PCSE)

IRQ	Coef.	t-value	p-value	Sig
BSZ	.229	2.22	.026	**
BIND	.369	0.59	.556
BEX	.039	0.16	.871
BGN	.457	2.26	.024	**
BMEE	.15	3.13	.002	***
ROA	.156	4.33	0	***
ROE	−.051	−3.36	.001	***
FSZ	.662	2.11	.035	**
FAG	−.042	−4.88	0	***
LEV	4.697	6.87	0	***
Constant	35.07	7.29	0	***
SD dependent var	4.515
Number of obs	173
Prob > chi2	0.000
Mean dependent var	54.370
R-squared	0.892
Chi-square	54.888
Industry Dummies	YES
Year Dummies	YES
Pesaran’s test Cross-sectional dependence p-value	23.723 0.0000
Autocorrelation F (1, 33) Prob. > F	45.957 0.0000
Heteroscedasticity Chi2(1) Prob> Chi2	12.14 0.0005

*** p < .01, ** p < .05, * p < .1

Note: BSZ = Board Size, BIND = Board Independence, BEX = Board Financial Expertise, BGN = Board Gender Diversity, BMEE = Board Meetings, ROA = Return on assets, ROE = Return on equity, FSZ = Firm size, FAG = Firm Age, LEV = Leverage

Table 8. Regression using feasible generalized least squares (FGLS)

IRQ	Coefficient	t-value	p-value	Sig
BSZ	.254	2.86	.004	***
BIND	−1.687	−1.58	.113
BEX	−.014	−0.11	.916
BGN	2.541	2.05	.041	**
BMEE	.112	3.01	.003	***
ROA	.067	1.22	.224
ROE	−.035	−1.59	.112
FSZ	.328	1.92	.054	*
FAG	−.022	−2.96	.003	***
LEV	4.872	3.61	0	***
Constant	41.614	14.71	0	***
Industry Yes
Year Yes
Observations 173
Wald Chi2(25) 396.30
Prob > chi2 0.000

Note: *** p < .01, ** p < .05, * p < .1, (BSZ = Board Size, BIND = Board Independence, BEX = Board Financial Expertise, BGN = Board Gender Diversity, BMEE = Board Meetings, ROA = Return on assets, ROE = Return on equity, FSZ = Firm size, FAG = Firm Age, LEV = Leverage)