Purpose The purpose of this paper is to test the relationship between earnings quality and the cost of debt for private companies in a “code-law” country (Ball et al., 2000). The analysis controls for company size, debt level and audited information. Design/methodology/approach The paper uses the ordinary least squares regression technique to test the relationship between earnings quality and the cost of debt. Findings The collected empirical evidence shows a negative relationship between earnings quality and the cost of debt and controls for company size and debt level. Such a relationship is stronger when the company information is audited. Research limitations/implications Similar to other studies, this paper has two main limitations. There was no access to specific data on the interest rates charged on bank loans, implying that the cost of debt is measured by the ratio of the interest expense to interest-bearing debt. The research only uses earnings quality measures based on abnormal accruals. Practical implications The collected evidence suggests that earnings quality have economic consequences for private companies by affecting their cost of debt, similar to those observed in previous studies for listed companies. This evidence can be seen as an incentive for private companies to increase their financial information quality. For debt providers, namely, financial institutions, the findings can be of interest to help them price properly the loans they make available to private companies. In general, the findings of this research can be of interest for company managers and financial institutions in countries with an institutional environment similar to that of Portugal. Originality/value The relation between earnings quality and the cost of debt has been so far studied for listed companies in “common law” countries. This paper provides new and complementary evidence about such relation for private companies and “code-law” country.

This paper investigates the effects of Directive 95/2014/EU on the quality of non-financial information (NFI) disclosed by Portuguese listed companies and explains the reporting practices adopted in this context. For this purpose, a content analysis of non-financial disclosures made a year before (2016) and in the first and second years of the implementation of the Directive (2017 and 2018) was performed. A self-constructed index that covers the disclosure matters required by the Directive was used to measure the quality of NFI. The findings showed that the major effects on the quality of non-financial disclosures were observed in the first year of implementation. Furthermore, it was observed that companies that had high-quality voluntary reporting practices, such as the presentation of a sustainability report, the use of GRI Standards and the certification of NFI, maintained these practices after the Directive. After two years of implementation, there were still companies that did not mention the framework used or did not disclose information on sensitive matters such as human rights or anti-corruption and bribery. The evidence found supports the existence of a ‘routine’ effect that has influenced the reporting practices adopted. The results obtained have implications for policymakers helping them to identify aspects of the Directive’s requirements that need to be improved.

Corporate sustainability integrates financial performance with environmental, social, and governance (ESG) performance. Due to their personal characteristics, women can play an important role in promoting sustainable actions and strategic decision-making, creating positive effects on a company’s financial performance. The main objective of this paper is to analyze the effect of Board gender diversity on financial performance, in the context of Portuguese listed companies. Financial performance was measured through an accounting-based measure, the return on assets (ROA), and a market-based measure, the Tobin’s Q. Board gender diversity was proxied through several measures identified in the literature and the information needed to construct them was manually collected from the corporate governance reports. A regression analysis was conducted on panel data consisting of 29 companies from the period from 2010 to 2019. The results show that female presence is positively related with ROA when there are at least two women on the Board, or when the proportion of women is, at the least, 20%. A positive relationship was also found between the Tobin’s Q and the presence of at least 20% women on the Board. The results confirm the existence of the positive effects of Board gender diversity on financial performance, as predicted by resource dependence theory and agency theory, but only when a critical mass of women is reached. In general, we conclude that, although gender diversity promotion measures underlying Portuguese legislation are not yet fully consolidated, the imposed threshold of 20% women on Boards is a signal sent to the market and one that is valued by investors.

After decades of many corporate scandals and financial meltdowns, the quest for effective corporate governance and firm performance has raised the concern of a lot of academicians, practitioners, and researchers regarding articles written on this issue. This study seeks to review corporate governance and firm performance articles written in Ghana under the author’s keywords in order to fulfill the objective. The goal is to identify the research trend and then to suggest the idea of future research directions. The study has conducted a review of corporate governance research by searching at Scopus and Web of Science research databases from 2006 to 2020 to prepare the list of articles. A comprehensive review of recent corporate governance and firm performance literature is essential because it provides a basis for comparing Ghana’s corporate governance research experience with other emerging economies in other continents. The findings reveal that two keywords on corporate governance analysed in this study – board composition and ownership – have many written articles, while compensation has the least number of articles. However, in the future, gender diversity and audit committee may be investigated since it has received global attention.

Integrated reporting is essentially a voluntary practice worldwide. For this reason, although it is growing, its diffusion is slow. Based on the Portuguese context, where a reduced number of listed companies publish integrated reports, this study aims to explore the drivers and barriers for the voluntary adoption of integrated reporting and the reporting practices up to the production of an integrated report. To this end, an analytical framework based on the Diffusion of Innovation Theory was developed and applied to data collected from a survey and corporate reports from both “adopters” and “non-adopters”. The evidence collected suggests that the adoption of integrated reporting may be driven by the perception of a relative advantage over traditional reporting in terms of providing more relevant information to capital providers, particularly banks. The publication of an integrated report appears to be the result of a process of incremental improvements in the practice of disclosure and assurance of non-financial information, so that the previous experience with sustainability reporting is also an important driver for voluntary integrated reporting. Finally, companies may be differently prepared for transition to integrated reporting and, therefore, have different perceptions of its cost and complexity, which may act as a barrier.