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Is online disclosure the key to corporate governance?

Is online disclosure the key to corporate governance? The economic literature shows contradictory results when the relationship between corporate governance and financial position is assessed. The purpose of this paper is to analyze the role of the online disclosure of information, as an omitted variable, in this relationship.Design/methodology/approachIn order to test the role of the online disclosure of information, a set of the structural equation models is evaluated. In these models, the indirect effect of the online disclosure on the relationship between corporate governance and the financial position, defined by performance, funding and investment, is analyzed.FindingsUsing data from a sample of 252 Spanish public non-profits between 2012 and 2016, the authors found that the development of corporate governance practices is not, by itself, able to improve the financial position of these organizations. These improvements can only be achieved if the online disclosure is promoted.Research limitations/implicationsOrganizations should not only follow corporate governance practices but also communicate to the stakeholders the degree of development of these practices in an exercise of accountability. Finally, Web 3.0 practices must be promoted because they can be a mechanism to reinforce corporate governance practices and achieve a solid financial position.Originality/valueThis study contributes to the debate about the role of the online disclosure, introducing this transparent practice as a variable omitted by previous research. Moreover, the authors have considered the evolution for a period of four years in relation to the information published by each organization on the internet. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Online Information Review Emerald Publishing

Is online disclosure the key to corporate governance?

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References (117)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1468-4527
DOI
10.1108/oir-06-2018-0191
Publisher site
See Article on Publisher Site

Abstract

The economic literature shows contradictory results when the relationship between corporate governance and financial position is assessed. The purpose of this paper is to analyze the role of the online disclosure of information, as an omitted variable, in this relationship.Design/methodology/approachIn order to test the role of the online disclosure of information, a set of the structural equation models is evaluated. In these models, the indirect effect of the online disclosure on the relationship between corporate governance and the financial position, defined by performance, funding and investment, is analyzed.FindingsUsing data from a sample of 252 Spanish public non-profits between 2012 and 2016, the authors found that the development of corporate governance practices is not, by itself, able to improve the financial position of these organizations. These improvements can only be achieved if the online disclosure is promoted.Research limitations/implicationsOrganizations should not only follow corporate governance practices but also communicate to the stakeholders the degree of development of these practices in an exercise of accountability. Finally, Web 3.0 practices must be promoted because they can be a mechanism to reinforce corporate governance practices and achieve a solid financial position.Originality/valueThis study contributes to the debate about the role of the online disclosure, introducing this transparent practice as a variable omitted by previous research. Moreover, the authors have considered the evolution for a period of four years in relation to the information published by each organization on the internet.

Journal

Online Information Review – Emerald Publishing

Published: Sep 3, 2019

Keywords: Corporate governance; Financial position; Third sector; Online disclosure

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