Retail Investors’ Perceptions of the Decision-Usefulness of Economic Performance, Governance, and Corporate Social Responsibility Disclosures

Abstract

Academic literature and the business press have placed increased attention on the corporate disclosure of nonfinancial information. This study uses a survey of 750 retail investors to examine perceptions about indicators of economic performance, corporate governance policies and performance, and corporate social responsibility. Survey results indicate that retail investors currently are most concerned with economic performance information, followed by governance, and then corporate social responsibility information. Those respondents who currently hold socially responsible investments use more of all three types of nonfinancial information than respondents who currently do not hold socially responsible investments. Further, retail investors clearly prefer to obtain information about corporate social responsibility information from a third-party source and governance information from an audited or regulated document, while they use both sources to garner information about indicators of economic performance. Respondents expressed an interest in increasing their use of nonfinancial information in the future. When respondents were asked to indicate the specific types of information they had the greatest interest in using in the future, economic performance indicators such as market share, customer satisfaction, and product innovation information were predominant.

Board Independence and Corporate Social Responsibility Disclosure: The Mediating Role of the Presence of Family Ownership

“…CSR information may be of interest to stakeholders as it covers a wide range of indicators of economic, social and environmental aspects (Williams and Pei 1999). Investors in recent years are looking to CSR information as one of the key factors in making an investment decision (Cohen et al 2011;Chau 2006). Cho et al (2013) show it helps in bringing down the uncertainty about the firm's value and Dhaliwal et al (2012) shows that CSR information reduces information asymmetry and decreases the analyst forecast error.…”

“…CSR information is useful to different stakeholders as it covers a wide number of topics related to economic, social and the environment (Williams and Pei 1999). The investor uses CSR information as one of the important factors while making an investing decision (Cohen et al 2011;Chau 2006) and it also reduces the information asymmetry in the firms (Dhaliwal et al 2012). However, due to the voluntary nature of CSR information, its disclosure could be purely based on the preference and motives of the managers and directors (Healy and Palepu 2001;Meek et al 1995).…”

The Relationship between Audit and Risk Management Committees on Financial Performance of Non-financial Companies in Nigeria: A Conceptual Review

“…Apart from compulsory or regulatory requirements, it could be considered a way to mediate and moderate agency conflicts and information asymmetries (Cohen, Holder-Webb, Nath, & Wood, 2011;Voeller et al, 2013;Watts & Zimmerman, 2014). Internal audit function is one of the pillars of corporate governance (Abiola, 2012), he found out that is significant relationship between audit committee and performance.…”

Investor Attitudes, Investment Screen Use, and Socially Responsible Investment Behavior

“…Today, more than one out of every nine dollars under professional management in the US is invested in SRIs totaling $3.74 trillion, a 22 percent increase since year-end 2009 (USSIF 2012, 11). There is evidence that socially responsible investors use CSR performance information (Cohen et al 2011), and that the supply of such information is rapidly increasing (Holder-Webb et al 2009;KPMG 2011).…”