The impact of corporate governance on Internet Financial Reporting in Concentrated ownership companies

Abstract. This study investigates, upon agency theory, the effect of corporate governance (CG) on Internet Financial Reporting disclosure (IFR) in an ownership concentrated environment, such as Ita-ly. We hypothesize that IFR may be explained in term of increasing transparency in order to defend minority shareholder interest, so we predict a positive association between the extent of a firm’s IFR and its CG and a negative association between IFR and ownership structure. CG is measured by ownership structure, using as a proxy the share held by the first three major shareholders and by man-agerial ownership, and by board composition, captured through the incidence of independent director (IND) and of a Non-Executive Chair (NEC). IFR is measured taking in consideration content and format of information present in Investor Relations sections. We find that IND and NEC of Italian listed firms increasing transparency through voluntary disclosure information and, therefore, protect-ed minority shareholders’ interest.

In the context of agency theory this study investigates the effect of corporate governance (CG) on Internet Fianncial Reporting disclosure (IFR) in concentrated ownership envitonment, such as Italy. We hypothesize that IFR may be explain in term of increasing trasparency in order to defen minority shareholder interest, so we predict, and find, a positive association between the extent of a firm's IFR and its CG and a negative assocaition between IFR and ownership structure.