Does Family Ownership moderate the relationship between Corporate Governance and Integrating Reporting Practices: A case of Non-Financial Firms in Pakistan

Muhammad Naeem; Anita Larik; Salman Memon; Muhammad Rafique Shaikh

doi:10.58921/jobams.7.1.150

Muhammad Naeem Lecturer, Sindh Institute of Management and Technology, Karachi
Anita Larik Senior Lecturer Sindh Institute of Management and Technology Karachi, Pakistan
Salman Memon Assistant Professor Sindh Institute of Management & Technology, Karachi
Muhammad Rafique Shaikh Assistant Professor Sindh Institute of Management & Technology, Karachi

DOI: https://doi.org/10.58921/jobams.7.1.150

Keywords: Integrated reporting, Corporate Governance, Family Ownership, Fixed Effect

Abstract

Purpose: Financial scandals and a decline in stakeholders' trust in the transparency of financial reporting from firms have been caused by ineffective oversight, a weak corporate governance system, and ownership in few hands i.e. family ownership and its involvement in firm affairs. Implementing an effective corporate governance practice and integrated reporting in this context is important to reducing these issues. So the purpose of this study is to check the impact of corporate governance on integrated reporting and the moderating role of family ownership. Design/Methodology/approach: Sixty-four non-financial firms were selected as samples registered on the Pakistan Stock Exchange (PSX) from 2016 to 2023. The impact of corporate governance indicators i.e., board size, board independence, board meetings, and CEO duality is estimated on the integrated reporting index. We develop an integrated reporting index by calculating the weighted mean of thirty integrated reporting variables. This study applied the fixed-effect technique to test this regression model.

Findings: The results revealed that board meetings improve integrated reporting whereas board size, CEO duality, and board independence adversely impact the quality of integrated reporting. We also find that family ownership moderates this relationship. Additionally, the result reveals that Pakistani firms are constantly improving reporting quality by increasing the number of integrated reporting attributes by following the disclosure principle in their annual reports such as accountability and transparency to build trust with stakeholders.

Research limitations/implications: For practitioners like investors, regulators, and other company stakeholders, our findings offer novel perspectives on corporate governance practices and integrated reporting.

Originality/value: The study's consequences contribute to the scholarly discussion on corporate governance practices and integrated reporting.