Enhancing financial reporting: challenges and opportunities in corporate governance statements

• Pages: 773-778
• DOI: https://doi.org/10.1108/CG-10-2018-302
• Date: 22 October 2018
• Published date: 22 October 2018
• Author: Michail Nerantzidis
• Subject Matter: Corporate governance,Strategy

Editorial

Enhancing f‌inancial reporting: challenges

and opportunities in corporate governance

statements

Michail Nerantzidis

1. Introduction

Qualitative, non-numeric information makes up an important part of accounting disclosures.

(Asay et al., 2018,p.3)

In the past few decades, at a rapidlyaccelerating pace, accountants have started to analyze

voluntary/narrative disclosures to understand in a more comprehensive manner the

accounting phenomena (Teoh, 2018). This rising academic interest in narrative disclosures

has been triggered by the necessity of f‌inding new information beyond “traditional” that

would help them to go one step further and answer more complex research questions

(Francis et al.,2002). On this direction, to make corporate governance (CG) mechanisms

much more visible, a new narrativereport was introduced, either as a part of annual report or

as a separate document to inform investors about the CG practices, known as corporate

governance statement(CGS) (Nerantzidis, 2017).

This CGS is based on the dynamic procedure of the “comply or explain” principle

(Nerantzidis, 2015),a framework that allows companies either to comply withsoft law rules or

to deviate and explain the reasons for their “non-compliance” (Sergakis, 2015). This in turn

allows the recipients of this information to understand the way they are governed.

Considering that scholars have put more emphasis on compliance studies without

considering the noncompliance, this special issue is intended to provide advanced

knowledge regarding the role, the impact, the challenges and opportunities of CGS in

f‌inancial reporting.

For this reason, a total of 30 papers were submitted to the special issue and after a year of

systematic consideration and follow-up and multiple rounds of revisions and reviews, 11

papers met the requirements of CorporateGovernance: the International Journal of Business

in Society (the accepted papers are depicted on Table I). The accepted papers ref‌lect a

normal distribution among research topics, countries and methodologies that have been

used by authors. More specif‌ically, the special issue covers a wide diversity of themes

motivated by theoretical underpinnings such as agency, signal and institutional theory. In

particular, the 11 paperson this Special Issue address ongoingissues such as the eff‌icacy of

“comply or explain”approach, the potential role of audit market in CG statement, new ways to

supervise theinformation disclosed and strengthen the “complyor explain” regime.

As can be seen in Table I, the second column(entitled “Region”) shows the countries where

CG practices have been analyzed. The majority of studies, 3 out of 11 have focused on

European Union (Cash, 2018;Tampakoudis et al., 2018;Vasilakopoulos et al.,2018),

whereas the rest are distributed among different continentals and are country specif‌ic

Michail Nerantzidis is

based at Hellenic Open

University.

I would like to thank the Editor

in Chief Associate Professor

Gabriel Eweje for insightful

comments and suggestions,

Lauren Malone Content Editor,

Emerald Publishing for her as-

sistance and contributors and

reviewers for their academic

association and contributions

to the Corporate Governance’s

special issue.

DOI 10.1108/CG-10-2018-302 VOL. 18 NO. 5 2018, pp. 773-778, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 773