Abstract/Summary

This thesis aims to make contribution on the empirical investigation of corporate financial disclosure on social media in two principal ways. Underpinned by two alternative theoretical frameworks in voluntary disclosure research, two empirical studies are conducted in this thesis. The first study investigates the strategic use of defensive and assertive impression management strategies and the influence of firm performance on accounting narratives. Social media provides firms with a great level of control over the corporate image they intend to construct during corporate communication processes on this platform. This study investigates earnings-related disclosures of FTSE 100 companies on Twitter. The findings indicate that firms tend to minimise negative earnings information but employ self-presentational patterns and dissemination tools to emphasise positive information on social media. Specifically, improving performers tend to disclose and disseminate more earnings information to achieve a higher degree of stakeholder engagement comparing to declining performers. Based on these findings, this study concludes that firms opportunistically present themselves on social media so as to construct or maintain a positive corporate image. The second study draws from the stakeholder theory perspective and investigates whether board independence is a key determinant of firms’ financial disclosure on social media in terms of the level and connectivity of financial disclosure. The sample of this study consists of 868 firm-year observations of earnings-related disclosure on Twitter from FTSE 350 companies. This study finds that the level of financial information on social media is positively and significantly associated with the proportion of independent directors on the board. Moreover, the connectivity of financial disclosure which captures the communicative effectiveness of disclosure, measured by the CONNECT index score, is also positively and significantly associated with board independence. Findings from additional analysis suggests that board independence is not a direct determinant of the level of stakeholder engagement on social media. Financial disclosure attributes including the volume and connectivity of disclosure are found to be associated with the level of stakeholder engagement on social media. This study concludes that higher board independence enhances corporate transparency and communicative effectiveness through increased amount and enhanced connectivity of disclosure during financial communications with stakeholders on social media.