Portal de Periódicos da CAPES

Corporate governance of executive directors’ remuneration: Measurement and determinant analysis

2022; Volume: 24; Issue: 1 Linguagem: Inglês

10.54483/sajaar.2022.24.1.5

1028-9011

Henriëtte Scholtz, George Nel, E. V.D.M. Smit,

Financial Reporting and Valuation Research

No AccessCorporate governance of executive directors' remuneration: Measurement and determinant analysis Henriette E. Scholtz, George F. Nel and Eon VdM. Smit Henriette E. Scholtz1 https://orcid.org/0000-0002-8511-4941 , George F. Nel1 https://orcid.org/0000-0001-5503-9883 and Eon VdM. Smit2 https://orcid.org/0000-0001-6090-6056 Affiliations 1School of Accountancy, Stellenbosch University 2Stellenbosch Business School Published Online:1 Nov 2022https://doi.org/10.54483/sajaar.2022.24.1.5https://hdl.handle.net/10520/ejc-sajaar_v24_n1_a6SectionsPDFView Full Text ToolsAdd to favouritesDownload CitationsTrack Citations ShareShare onFacebookTwitterLinked InRedditGMailOutlookYammermore AboutAbstractPurpose:The purpose of this study was twofold - to measure the extent of corporate governance disclosure that aims to govern executive directors' remuneration (CGE) compliance for a sample of firms listed on the Johannesburg Securities Exchange, and to develop a model that best explains variations in CGE disclosure levels amongst listed firms.Design/methodology/approach:A CGE score was calculated for each of the firms included in the study sample of 100 firms, using a self-constructed measurement instrument. The CGE instrument consists of 114 CGE measures based on the King III- and King IV codes, Johannesburg Securities Exchange listing requirements, the Companies Act and international best practice. A literature review was conducted to identify possible determinants of CGE, whilst stepwise regression model-building was used to develop a model that best explains variation in CGE disclosure practices.Findings:The results showed that larger firms, more profitable firms, and firms that were audited by a big four audit firm, outperform other firms in CGE disclosure practices. Noteworthy, is that CGE disclosure practices appear to be neglected by firms with higher levels of managerial power, as measured by directors' shareholding. Finally, firms in the financial services industry had lower CGE scores compared to firms listed in the basic materials, industrials, and goods- and services industries.Originality/value:This study sought to extend and contribute to the knowledge, by providing evidence on the disclosure of CGE measures and insights into the determinants of CGE disclosure in the South African market. The findings offered insights into the financial variables, firm characteristics and ownership variables that drive the disclosure of CGE measures. Strengthening CGE disclosure may provide shareholders and other stakeholders sufficient information to comprehend the remuneration decisions made by firms. In conclusion, the findings suggested that policy-makers and regulators should consider providing more guidance and training to firms struggling to implement CGE measures.Ahmed S.P.Zannat RAhmed S.U.2017 "Corporate governance practices in the banking sector of Bangladesh: Do they really matter?" 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governancetransparencyexecutive directors' remunerationaccountabilityintegrated reportPDF download Disclosure The authors confirm that the manuscript has been read and approved by all named authors and that there are no other persons who satisfied the criteria for authorship but are not listed. 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