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We examine the relationship between brand capital and stock price crash risk. Crash risk, defined as the negative skewness in the distribution of returns for individual stocks, captures asymmetry in risk, and has important implications for investment choices and risk management. Using a sample of 39,685 publicly listed U.S. firm-year observations covering 1975 to 2018, we show that brand capital is significantly and negatively related to crash risk. We also use an advanced machine learning approach and confirm that brand capital is a strong predictor of future stock price crashes. Our cross-sectional analyses show that this negative relationship is more evident for subsamples with transitory poor earnings performance or persistent good earnings performance, greater corporate tax avoidance, and weak corporate governance structures. The results survive numerous robustness tests, including the use of alternative measures of brand capital, crash risk, and several endogeneity tests. In sum, our findings are consistent with agency theory, suggesting that high levels of brand capital expose firms to investor and customer scrutiny, which reduces managerial opportunistic behavior that may include the accumulation and concealment of negative information. This paper was accepted by Karl Diether, finance.

We examine whether state-level corruption and corporate tax avoidance in the United States (U.S) are related. Using a sample of 36,078 U.S. firm-year observations from 1998 to 2014, we find that corruption is significantly positively related to tax avoidance. Our main finding is consistent across a series of robustness tests. In additional analysis at the state level, we observe that corruption is significantly positively related to corporate tax avoidance in states that have low levels of litigation risk, irrespective of whether the states rank high or low in terms of corporate governance, social capital, or money laundering. We also correlate state- and firm-level corruption with firm-level corporate tax avoidance and find that the interaction terms are generally significantly positively related to corporate tax avoidance. Finally, we show that state-level corruption and corporate tax avoidance are complementary across industry sectors. Overall, our results indicate that the broader state-level corruption (cultural) effects of where a firm is headquartered have significant consequences for corporate tax avoidance.

Purpose The purpose of this paper is to examine the relation between financial statement comparability and corporate investment efficiency of a large sample of US firms. Design/methodology/approach The authors use a large sample of US-listed firms from 1981 to 2013. The authors use several econometric methods including ordinary least square, firms fixed effects and mediation effects regression. Sensitivity tests that include the use of alternative measures of both the dependent and independent variables provide results that are consistent with the authors’ baseline model results. Findings The authors find that financial statement comparability mitigates risks associated with both under-investment and over-investment. They also find that product market competition mediates the relation between financial statement comparability and investment efficiency. The authors consider this to be a function of a competitive environment, whereby firms normally disclose less private information. This in turn reduces the effect of financial statement comparability on investment efficiency. Conversely, where there are higher levels of product market competition, it is less likely that firms will under-invest. Their results are consistent with these predictions. Originality/value The authors contribute to this growing field of research by providing evidence that financial statement comparability does in fact improve firms’ investment efficiency. Findings enhance our understanding of the relation between investment efficiency and financial statement comparability which is likely to have flow-on effects in terms of financial reporting quality and firm value. This study also contributes to research that links agency theory to financial statement comparability through an analysis of moral hazard and adverse selection tenets, and how it leads to reduced levels of investment inefficiency in a firm.

This study examines the effect of income shifting on the implied cost of equity capital (ICOE) for US multinational corporations (MNCs). We find that income shifting is significantly positively ass...

This study investigates the associations between investment efficiency and both the existence of a board investment committee (IC) and its expertise. Using a sample of industrial firms from six Gul...

PurposeThe purpose of this paper is to examine the association between debt maturity structure and stock price crash risk in Australia.Design/methodology/approachThe authors employ panel data estimation with industry and year fixed effects. The paper uses a sample of 1,548 publicly listed Australian firms (8,661 firm-year observations) covering the 2000–2015 period.FindingsStock price crash risk is positively and significantly associated with the long-term debt maturity structure of firms. In addition, this positive association is more pronounced for firms with a more opaque information environment.Originality/valueThis is the first study to examine stock price crash risk in Australia. The findings are value relevant as it uncovers how debt maturity structure affects shareholders' wealth protection.

This paper investigates the relation between labor investment inefficiency and corporate tax avoidance. Employing a large sample of 61,542 U.S. firm-year observations over the 1962–2014 period, our regression results show that labor investment inefficiency is significantly positively related to tax avoidance. More specifically, we find that a one standard deviation of labor investment inefficiency leads to a 0.71% reduction in the accounting effective tax rate. Our findings are robust to endogeneity concerns, alternative proxy measures of tax avoidance and labor investment efficiency, and additional control variables pertaining to accounting quality and managerial ability. Taken together, our regression results show that labor investment inefficiency is an important determinant of corporate tax avoidance.

Purpose This paper aims to investigate whether the amount of local governments’ debt can be predicted by the level of political competition. Design/methodology/approach The study uses the artificial neural network (ANN) to test whether ANN can “learn” from the observed data and make reliable out-of-sample predictions of the target variable value (i.e. a local government’s debt level) for given values of the predictor variables. An ANN is a non-parametric prediction tool, that is, not susceptible to the common limitations of regression-based parametric forecasting models, e.g. multi-collinearity and latent non-linear relations. Findings The study finds that “political competition” is a useful predictor of a local government’s debt level. Moreover, a positive relationship between political competition and debt level is indicated, i.e. increases in political competition typically leads to increases in a local government’s level of debt. Originality/value The study contributes to public sector reporting literature by investigating whether public debt levels can be predicted on the basis of political competition while discounting factors such as “political ideology” and “fragmentation”. The findings of the study are consistent with the expectations posited by public choice theory and have implications for public sector auditing, policy and reporting standards, particularly in terms of minimising potential political opportunism.

In this study, we examine the relationship between corporate governance and the disclosure of market risk among financial firms from the Gulf Cooperation Council (GCC) region between 2007 and 2011. Using a comprehensive measure of the disclosure of market risk, our regression results suggest that the level of market risk disclosure is positively and significantly associated with the strength of a firm’s corporate governance structure. Economically, the regression coefficient implies that a 3.25% increase in market risk disclosures is associated with a one standard deviation change in the strength of corporate governance. In addition, when we decompose our corporate governance index into its constituent items, we find that directors’ independence and the dual roles of the CEO and chairman of the board reduce the extent and quality of market risk disclosures. Our results are robust to alternative specifications and endogeneity tests.

This study examines the effect of the general anti-avoidance rule (GAAR), introduced on January 1, 2008, to enforce corporate tax avoidance laws in China. Based on a sample of 517 Chinese firms over the 2006–2010 period (2585 firm-years), we find a reduction in tax avoidance following the implementation of the GAAR that appears to be the result of the new and stringent tax legislation and the consolidation of Chinese tax law. We also observe that the effects of firms’ engaging a Big Four auditor and directors with tax expertise in deterring tax avoidance significantly decreased following implementation of the GAAR. To all intents and purposes, it seems that the implementation of the GAAR in China has moderated the effects of and substituted for these particular monitoring and disciplining mechanisms.

We investigate whether directors with multiple outside board directorships are related to corporate financial strategy across firm life cycle stages. Using a large sample of firms from the Gulf Cooperation Council (GCC) countries, we find that when the number of directors with multiple board seats increases, firms' level of cash holdings rises, capital expenditure declines, selling, general and administrative (SG&A) expenses increase, and firm performance decreases. We further demonstrate how the relationship varies across different stages of their life cycle. Our findings have significant implications for policy makers, regulators and stockholders in GCC countries and in other emerging markets.

Mergers and acquisitions (M&A) are an essential way for enterprises to achieve sustainable development. As large sums of money are typically involved in M&A transactions, financing is a vital factor in outcomes. This study examines the relation between equity and debt financing of M&A on subsequent performance, and the effect of ownership (state-owned enterprises versus private-owned enterprises) on M&A performance in China. We are motivated to examine the relation between financing methods and M&A performance in China because the differences in ownership, resource availability and policy support by the government for many firms may affect subsequent performance. Using a large sample of Chinese A-share listed companies between 2009 and 2016, we find that equity-financed M&A transactions lead to significantly better performance than debt-financed transactions. Equity-financed M&A transactions of state-owned enterprises (SOEs) perform significantly better as compared to debt-financed M&A, whereas equity-financed M&A transactions of private-owned enterprises (POEs) have little effect on their performance. This study extends our insights into the relation between M&A financing types and firm performance under different ownership types in the context of emerging markets.

The purpose of this study is twofold. First, it examines the association between income‐shifting arrangements consisting of transfer pricing aggressiveness, tax haven use and foreign tax rate differentials, and Financial Interpretation No. 48 (FIN48, now ASC740–10‐25) unrecognized tax benefits (UTBs). Second, it analyzes the impact of audit specialization on the association between income‐shifting arrangements and UTBs. Using a dataset of 286 US multinational firms over the 2007–2016 period (2,097 firm‐years), our regression results show that income‐shifting arrangements represented by transfer pricing aggressiveness, tax haven use and foreign tax rate differentials are significantly positively associated with UTBs. We also observe that audit specialization magnifies the positive association between transfer pricing aggressiveness and UTBs, and foreign tax rate differentials and UTBs. Finally, in additional analysis we provide some evidence that the positive association between income‐shifting arrangements and UTBs is magnified in the post‐2010 uncertain tax position reporting requirement period. Overall, our study extends prior research on the topic of audit characteristics (i.e., audit specialization) and tax aggressiveness.

This study examines the effect of tax haven utilization on the implied cost of equity capital (ICOE) based on a sample of publicly listed U.S. multinational firms over the 2006–2014 period. Our regression results show that tax haven utilization is significantly positively associated with the ICOE. In terms of economic significance, we find that, on average, a one-standard deviation increase in tax haven utilization leads to an increase in the ICOE for our sample firms by approximately 0.30 percent or 30 basis points. We also observe that our regression results are robust to a number of endogeneity checks. In additional analysis, we find that high agency costs are likely to magnify the positive association between tax haven utilization and the ICOE, while high independent director monitoring could moderate this association. Overall, this study provides unique insights into the effect of tax haven utilization on the ICOE.

This paper investigates the joint effect of political connections, in the form of the royal family member on board, and corporate governance on the market risk disclosures of the Gulf Cooperation C...

This study examines whether tax haven use by Australian financial corporations is associated with the pricing of audit and non-audit services. It also analyzes whether the existence of financial corporations’ suspicious matters reports (SMRs) and whistle blower hotline facilities moderate the association between tax haven use and pricing of audit and non-audit services. We find a positive association between tax haven use and the pricing of audit and non-audit services. Our results are economically significant. For example, audit fees for financial corporations with tax haven use is around 23 per cent higher compared to corporations with no tax haven use, while non-audit fees for financial corporations with tax haven use is around 13 per cent higher compared to corporations with no tax haven use. We also find that the existence of SMRs and whistle blower hotline facilities both moderate the positive association between tax haven use and audit pricing. Overall, our results suggest that tax haven use has serious consequences for financial corporations’ pricing of audit and non-audit services, whereas SMRs and whistle blower hotline facilities assist corporations to reduce the risks concerning tax haven use.

This study examines the association between corporate social responsibility (CSR) performance and financial distress and additionally the moderating impact of firm life cycle stages on that association. Based on a sample of 651 publicly listed Australian firm-years’ data covering the 2007–2013 period, our regression results show that positive CSR activity significantly reduces financial distress of the firm. In addition, the negative association between positive CSR performance and financial distress is more pronounced for firms in mature life cycle stages. Our results are robust to alternative proxy measures of financial distress, CSR performance and life cycle stages.

This study examines whether the presence of ruling family members on boards of directors influences the extent and the quality of risk reporting. Based on a sample of publicly listed financial firms of the Gulf Cooperation Council countries between 2007 and 2011, our regression results show that ruling family board members reduce the quality and extent of risk disclosures. Firms with ruling family board members also disclose significantly less during periods of financial distress and when they are subject to higher levels of risk. We find that risk reporting is negatively associated with the existence of a ruling family director acting as the board chairperson, negatively associated with increasing proportions of ruling family directors on the board, and negatively associated with increasing numbers of board members who are connected to ruling family directors. Our results suggest that politically connected directors seize private benefits at the expense of their firms' shareholders. Our regression results hold after a series of robustness checks that control for endogeneity and for alternative measures of ruling family membership.

This study examines the association between market risk disclosures (MRDs) and the investment efficiency of financial firms from six emerging markets in the Gulf Cooperation Council (GCC) region. Based on a sample of 553 firm-year observations over the 2007–2011 period, we find that MRDs are significantly and negatively associated with both under-investment and over-investment and that this association is more pronounced for larger firms. We also find that the association between MRDs and under-investment is moderated during periods of economic distress such as the Global Financial Crisis of 2008 and that the association between MRDs and over-investment is magnified during periods of reduced financial distress. Our results are consistent with the idea that MRDs reduce information asymmetry, which ultimately improves investment efficiency. We contribute to the literature in an emerging market context by providing empirical evidence on the association between MRDs and investment efficiency across six emerging GCC capital markets. This study also fills a gap in the literature by providing evidence on the factors affecting the investment efficiency of financial firms.

This study examines the relationship between financial statement comparability and bank risk-taking. Our analysis of a sample of publicly listed U.S. banks over the 1994–2019 period shows that banks with more comparable financial statements are related to significantly less risk-taking. We also find that the negative relationship between comparability and risk-taking is more pronounced for firms with more severe moral hazard and agency problems. Our documented findings are robust across alternative measures of comparability and risk-taking and considering change analysis, after controlling for strength of corporate governance and using propensity score matching and two-stage least squares estimation to address endogeneity concerns. Our analysis also shows that the relationship between financial statement comparability and bank risk-taking is stronger for smaller banks than for larger banks. Overall, this study provides unique insights into the role of financial statement comparability in curbing risk-taking in the banking sector.

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We investigate the association between the voluntary formation of a board investment committee (IC) and corporate cash holdings for a large sample of Gulf Cooperation Council (GCC) firms over the 2005–2013 period. We provide evidence that the existence of a specialized IC increases corporate cash holdings. We also find that several IC characteristics, i.e., member experience, independence, number of meetings, and committee size, are associated with an increase in firms’ cash holdings. Furthermore, the local and foreign institutional ownership of GCC firms moderates the IC-cash holdings relationship. These results remain robust to alternative specifications of cash holdings and endogeneity tests. We contribute to the literature on firms’ incentives to hold cash and to the literature on governance in emerging market contexts.

This study examines whether the use of tax haven subsidiaries by U.S. multinational corporations (MNCs) is associated with the cost of bank loans. We find that more intensive tax haven subsidiary use by MNCs is positively associated with the cost of bank loans. In cross-sectional analyses, we identify channels through which the positive association between tax haven intensity and bank loan costs is more pronounced, such as a weak information environment, poor corporate governance, high CEO pay-for-performance and corporation-related wealth, and low managerial ability. We also find that intensive tax haven use is positively (negatively) associated with non-price loan contract terms, such as collateralization and financial covenants (loan maturity and general covenants). Our main result holds when public bonds are substituted for bank loans. Finally, additional analysis shows that MNCs with high levels of tax haven intensity are more likely to rely on bank loan financing than on raising debt from the bond market. Overall, this study adds to an emerging body of literature on corporate taxation and debt policy.

Purpose This paper aims to investigate the impact of women on the board of directors on corporate tax avoidance in Australia. Design/methodology/approach The authors use multivariate regression analysis to test the association between the presence of female directors on the board and tax aggressiveness. They also test for self-selection bias in the regression model by using the two-stage Heckman procedure. Findings This paper finds that relative to there being one female board member, high (i.e. greater than one member) female presence on the board of directors reduces the likelihood of tax aggressiveness. The results are robust after controlling for self-selection bias and using several alternative measures of tax aggressiveness. Research limitations/implications This study extends the extant literature on corporate governance and tax aggressiveness. This study is subject to several caveats. First, the sample is restricted to publicly listed Australian firms. Second, this study only examines the issue of women on the board of directors and tax aggressiveness in the context of Australia. Practical implications This research is timely, as there has been increased pressure by government bodies in Australia and globally to develop policies to increase female representation on the board of directors. Originality/value This study is the first to provide empirical evidence concerning the association between the presence of women on the board of directors and tax aggressiveness.

In this paper, we investigate the association between outside board directorships and family ownership concentration. Using a sample of 1091 firm-year observations of non-financial publicly listed firms from Gulf Cooperation Countries (GCC) during the 2005 to 2013 period, we find a positive association between family ownership and the number of outside directorships held by board members. This finding is consistent with the notion that family ownership reduces a board's monitoring capabilities. We also test whether the recent corporate governance reforms in GCC, which were designed to protect investors and minority shareholders, affect firms' incentives to establish a board nomination committee (NC). We find the existence of a board NC and the quality and characteristics of NC membership act to suppress the positive association between outside directorships and family ownership. Our results are robust to the use of alternative measures of outside directorships and family ownership and models that test for endogeneity. Overall, our results suggest that the institutional specificities of emerging economies such as those in the GCC can sustain high levels of multiple directorships, which could impair the quality of corporate governance.

This study examines whether a firm’s life cycle explains its propensity to engage in corporate tax avoidance. Based on the Dickinson (2011) model of firm life cycle stages and a large dataset of US publicly listed firms over the 1987–2013 period, we find that tax avoidance is significantly positively associated with the introduction and decline stages and significantly negatively associated with the growth and mature stages using the shake-out stage as a benchmark. We observe a U-shaped pattern in tax avoidance outcomes across the various life cycle stages in line with the predictions of dynamic resource-based theory. Our findings are consistent using several robustness checks. Overall, our results show that a firm’s life cycle stage is a significant determinant of tax avoidance.

Purpose– The purpose of this research is to investigate the factors determining the social and environmental reporting (SER) of Indian textile and apparel (TA) firms.Design/methodology/approach– The 2010 annual reports of a sample of top 100 Indian TA firms listed on the Bombay Stock Exchange were examined to assess the extent of SER. SER was assessed based on the Global Reporting Initiative index applicable to the TA industry. Multiple regression analysis was conducted to investigate the determinants of SER.Findings– This study reports a low extent of SER in the annual reports of Indian listed TA firms, with a mean disclosure of 14 per cent. On average, firms reported more extensive environmental information, with a mean disclosure of 18.4 per cent, compared to social information, with a mean disclosure of 10.7 per cent. Most firms reported social information relating to “labour practices and decent work”, while the reporting of information relating to “human rights” was sparse. Overall, the SER patterns provide support for legitimacy theory. Consistent with legitimacy theory expectations, corporate size, brand development and audit committee size are significant factors determining the variation in SER. No significant relationship was found between board independence, level of ownership and SER.Originality/value– There is no existing study specifically on SER by TA firms in India. In fact, there is surprisingly little research on SER in the Indian context in general. Given the dearth in research on corporate social reporting in the Indian context, the study extends prior literature on corporate SER by concentrating on SER of TA firms in an emerging economy. The theoretical contribution of this study is the testing of legitimacy theory in the context of an emerging economy. This study contributes towards practice by delineating the relationship between governance structure and SER, particularly with regard to issues such as child labour. These findings have implications for the future development of reporting standards and regulations in regard to corporate governance in India. The dearth of social reporting by Indian TA firms has implications for foreign purchasers of branded products, as international companies have been implicated in sub-optimal social or environmental practices or incidents.

This study empirically investigates the extent of corporate social disclosure (CSD) practices by Indian textile and apparel (TA) listed firms for the 2010-2012 time period. In spite of an upward trend in CSD practices by Indian TA listed firms, the results indicate a consistent low level of such important disclosure practices over the three year period with an overall mean disclosure of 10.44%. The overall low extent of CSD by Indian TA firms and the potential large adverse impact of this sector to the country’s social environment have major implications for future development of social reporting standards. Further analysis reveals that Indian TA listed firms commonly communicate social information relating to ‘labor practices and decent work’ while disclosure of ‘human rights’ is virtually non-existent. The finding may indicate that Indian TA firms place increasing importance in communicating labor practices related information as a possible strategy to alleviate tension amongst stakeholders in order to secure their societal legitimacy. Potential concern arises from noncommunication of social activities and related risks. Poor or non-existent disclosure may lead to questions whether Indian firms and their international brand-name affiliations have been transparent and accountable regarding their production and supply activities. The dearth of social disclosure by Indian TA firms has implications for foreign purchasers of branded products as international companies have been implicated in numerous sub-optimal social practices or incidents, at times leading to fierce criticism. The findings on the significant and positive influence of international brands and the interaction of this variable and international awards obtained on disclosure practices imply that such international exposures may put a higher level of pressure on Indian TA firms to communicate more social information as part of an overall package to better address global concerns on such crucial issues. The affiliation with international brand-name firms perhaps is the ultimate driver for the firms to provide more social information as a response to the growing awareness on such issues of their foreign renowned buyers. Firm characteristics control variables firm size, profitability and year of reporting are positively associated with the extent of CSD whereas CEO duality is negatively associated with the extent of CSD.

This paper examines the association between a series of income shifting incentives including multinationality, transfer pricing aggressiveness, thin capitalization, intangible assets and tax haven utilization. Our empirical analysis is based on a sample of 286 multinational U.S. firms over the 2006–2012 period (2002 firm-years). Our regression results show that multinationality, transfer pricing aggressiveness, thin capitalization and intangible assets are positively associated with tax haven utilization. Our results are consistent based on several robustness checks.

The purpose of this study is to examine the association between investment efficiency and corporate tax avoidance. Using a large sample of U.S. firms over the period 1993–2016, we show that there is a positive association between corporate tax avoidance activities and investment inefficiency. Moreover, we find that the association is mediated by financial statement readability, financial statement comparability and product market competition. Our results are robust to alternative measures of both tax avoidance and investment inefficiency. Propensity score matching (PSM), difference-in-difference (DID), and two-stage least squares (2SLS) regression analyses confirm our results and mitigate any potential endogeneity issues that might result from the effect of omitted variables, reverse causality or model misspecification.

© 2015, Springer Science+Business Media Dordrecht. This study examines the impact of board of director gender diversity on corporate tax aggressiveness. Based on a sample of 418 U.S. firms covering the 2006–2009 period (1672 firm-year observations), our ordinary least squares regression results show a negative and statistically significant association between female representation on the board and tax aggressiveness after controlling for endogeneity. Our results are consistent across several measures of tax aggressiveness and additional robustness checks.

© 2014 Elsevier B.V. We examine financial distress and tax aggressiveness spanning the global financial crisis (GFC) of 2008 and the impact of the interaction between board independence and firm-specific financial distress on tax aggressiveness. Our regression results show that both financial distress and the GFC are positively associated with tax aggressiveness. More importantly, we find that the positive association between financial distress and tax aggressiveness is magnified by the GFC. We also observe that the interaction between board independence and financial distress is positively associated with tax aggressiveness. Our results are robust to multiple measures of financial distress and tax aggressiveness.

This research investigates the association between discretionary disaggregation in mandatory risk disclosures, auditor conservatism and the implied cost of equity capital. Based on a sample of financial firms from the six Gulf Cooperation Council (GCC) countries in the period 2007–2011, we find that the implied cost of equity capital is significantly negatively associated with discretionary disaggregation in mandatory market risk disclosures after controlling for firm-specific characteristics and country-specific institutional factors. Furthermore, the interaction between auditor conservatism and disaggregation in firms’ mandatory risk disclosures is negatively associated with the implied cost of equity capital, suggesting that the firm disclosing more disaggregation in mandatory risk disclosure enjoys greater reduction in the implied cost of equity capital when audited by a conservative auditor. These findings are robust when subjected to a series of sensitivity tests. Collectively, these results demonstrate that more discretionary disaggregation in risk disclosures provides more private information to investors.

Using legitimacy theory, this study investigates the extent of social and environmental disclosure (SED) of Indian textile firms over the 2010-2012 period and the factors that explain such disclosure practices. Firm-level characteristics and corporate governance variables are incorporated as key predictors for these important disclosures. This study reveals a relatively low extent of 13.57% of SED in annual reports of Indian textile firms. This finding of low overall voluntary disclosure is largely consistent with the previous studies particularly in the emerging economies setting. The results show that firm size, international brand, audit committee independence, CEO duality, profitability, international certification obtained and year of reporting are statistically significant factors in explaining the variation in extent of SED. Potential concern may arise from such a lack corporate communication related to social or environmental activities and risks as it may lead to questions whether firms domiciled in India and their international brand-name affiliations have been transparent and accountable regarding their production and supply activities. The theoretical contribution of this study is the successful testing of legitimacy theory in the context of an emerging economy. This study highlights the influence of international exposures such as brand development and corporate governance attributes have on the SED communication practices. The dearth of social and environmental disclosure by Indian textile firms has implications for foreign purchasers of branded products as international companies have been implicated in sub-optimal social or environmental practices or incidents. Such international brand-name companies may be responsible for such breaches and face significant adverse publicity if negative social or environmental impacts or breaches of rules or regulations are found subsequent to the supply of these textile products. Significant negative media publicity may have unfavourable consequences on the reputation of these firms and their directors as well as their long-term financial performance. Firms with branded textile products likely use disclosure as an important means to promote an image of them being forward thinking socially and environmentally responsible entities for preserving their legitimacy status. This research offers empirical evidence in regard to social and environmental (SED) practices that may assist regulatory bodies to introduce more focused and effective non-financial disclosure guidelines and regulations.