Towards an XBRL-Enabled Corporate Governance Reporting Taxonomy An Empirical Study of NYSE-Listed Financial Institutions

376 Pages Posted: 29 Oct 2016

See all articles by Dirk Beerbaum

Dirk Beerbaum

Frankfurt School of Finance & Management; Aalto University - Department of Accounting and Finance; Aalto University - School of Business

Date Written: July 1, 2015

Abstract

Corporate Governance failures of large corporations such as Lehman Brothers have evoked a plethora of calls for changes in Corporate Governance Principles. Despite the fact that after the financial crisis, a number of transnational institutions have called for wide-scale changes related to Corporate Governance Principles by further protecting shareholders’ rights, it has been proven that theoretical extension and reform of Corporate Governance Principles is not enough, because it does not ensure successful implementation. According to a report from Isaksson (2009), corporate disclosures were not in line with OECD principles on good Corporate Governance. Moreover, according to Isaksson (2009), the financial crisis can also be traced back to incomplete Corporate Governance disclosures.

One major implementation topic involves Corporate Governance Reporting, which is very complex for multinational companies, as it involves statutory compliance with multiple rules and laws, coping with heterogeneous “Systems of Corporate Governance” (Weimer and Pape, 1999; Leuz et al., 2003; Tylecote and Visintin, 2007) and additionally the compilation of codes (Cadbury, 1993) and industry-specific standards (Mach et al., 2006; Bebchuk and Spamann, 2010). Extensible Business Reporting Language (XBRL) is assumed as a benchmark related to interactive business disclosures (Chen and Sun, 2009; Debreceny et al., 2010; Alles and Piechocki, 2012). Does XBRL have the potential to help to reduce the complexity of companies’ Corporate Governance Reporting (Alles and Piechocki, 2012)? In the academic literature, there are many articles which conclude that it is possible for XBRL to enhance transparency and improve Corporate Governance for financial reporting (Abdullah et al., 2009; Roohani et al., 2010; Alles and Piechocki, 2012; Müller-Wickop et al., 2013): therefore, an additional question is whether the application of XBRL to the non-financial reporting of Corporate Governance can also contribute to enhanced transparency.

XBRL will become mandatory based on the legal requirement of the Security and Exchange Commission (SEC) for Foreign Private Issuers (FPI) that are listed on the NYSE (Debreceny et al., 2010). Investors demand the extension of XBRL-enabled reporting to other financial reports, including CGR (Arnold et al., 2012), because within the peer group of listed Foreign Private Issuers on the New York Stock Exchange, comprising Financial Institutions, there is no adequate Corporate Governance framework to reflect Corporate Governance Reporting. Therefore, in this doctoral thesis, a taxonomy on Corporate Governance will be developed which can be put into practice for Corporate Governance Reporting.

Suggested Citation

Beerbaum Dr., Dirk, Towards an XBRL-Enabled Corporate Governance Reporting Taxonomy An Empirical Study of NYSE-Listed Financial Institutions (July 1, 2015). Available at SSRN: https://ssrn.com/abstract=2857976 or http://dx.doi.org/10.2139/ssrn.2857976

Dirk Beerbaum Dr. (Contact Author)

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

Aalto University - Department of Accounting and Finance ( email )

P.O. Box 1210
Helsinki, 00100
Finland

Aalto University - School of Business ( email )

Finland

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
154
Abstract Views
1,896
Rank
345,405
PlumX Metrics