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

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

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

Abstract

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 concentrated ownership, particularly 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. The purpose of this study is to examine the impact of corporate governance on integrated reporting and the moderating role of family ownership. 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. The results showed that board meetings positively impact integrated reporting, while board size, CEO duality, and board independence have a negative effect on integrated reporting quality. We also find that family ownership moderates this relationship. In addition, the results show that Pakistan-based firms have been consistently enhancing their reporting quality by increasing the number of integrated reporting attributes by respecting the principle of disclosures in their annual reports, which depict notions of accountability and transparency, to develop trust with stakeholders. For practitioners, such as investors, regulators, and other stakeholders of the firm, our study adds new perspectives to corporate governance practices and integrated reporting. Also, the implications of the study contribute to the academic debates of corporate governance practices and integrated reporting.