Abstract/Summary

This study examines the moderating impact of board diversity (BD) characteristics on the relationship between integrated reporting quality and analyst forecast accuracy. One main research question is posed to examine the impact of integrated reporting quality (IRQ)on analyst forecast accuracy, followed by four overarching sub-research questions: first, to examine whether board gender diversity influences the relationship between integrated reporting quality and analyst forecast accuracy (AFA); second, to examine whether board age diversity influences the relationship between integrated reporting quality and analyst forecast accuracy; third, to examine whether board tenure diversity influences the relationship between integrated reporting quality and analyst forecast accuracy; and finally, to examine whether board nationality diversity influences the relationship between integrated reporting quality and analyst forecast accuracy. Using an unbalanced panel dataset of Johannesburg Stock Exchange (JSE) listed firms for the period 2010-2021, this study analyzes data collected from different databases, including annual integrated reporting, DataStream, and board-ex databases. Several findings are documented. First, the interaction between integrated reporting quality and the diversity in tenure and gender is significant, with a negative coefficient. This indicates that the effect of integrated reporting on analyst forecast accuracy decreases when the diversity in gender and tenure is higher. Second, board age does not significantly moderate the effect of integrated reporting quality on analyst forecast accuracy. Finally, the effect of integrated reporting on analyst forecast accuracy is more positive at a higher level of diversity in nationality. This research contributes to several fields as it integrates reporting and corporate governance literatures. The first contribution is that this study presents empirical evidence on how different characteristics of board diversity (such as gender, age, tenure, and nationality) moderate the relationship between the quality of integrated reporting and the accuracy of analyst forecasts. In an emerging market environment, the research focuses specifically on firms listed on the Johannesburg Stock Exchange. The second contribution is that the researcher manually collected the data by assessing the quality of the company's annual integrated reports and assigning them a score from 0 to 5 according to the IIRC framework criteria. The third contribution is that this study offers an expanded and updated temporal scope for the study sample, covering a longer period from 2010 to 2021.