HARP Seminar, presented by Dr Ann Jorissen: "The Relationship Between Board diversity and Voluntary Tax Disclosures of Large, Listed European firms: Do Institutional Characteristics Matter?"

Abstract:

An increasing number of countries issue regulations on different aspects of board diversity, causing research attention to the antecedents and consequences of board diversity to grow. In this study, we focus on two different types of board diversity, namely gender diversity and employee board representation diversity and examine whether both types of diversity act as antecedents to voluntary tax disclosures in large listed European firms. In addition, we also examine whether the presence of a CSR committee is related to a firm’s voluntary tax disclosures. Subsequently, we study whether country-level formal and informal institutional characteristics moderate the relationships between these board characteristics and voluntary tax disclosures. To test our hypotheses, we hand-collected voluntary tax disclosures in annual and sustainability reports of 229 firms over seven years, resulting in 1,603 firm-year observations. We find that employee board representation and the existence of a CSR committee are significantly positively associated with more voluntary tax disclosures. In addition, both relationships are moderated by a country’s formal institutions captured by the level of tax enforcement, and a country’s informal institutions captured by the country’s level of tax morale. Specifically, we find that the positive relationship between employee board representation and the level of voluntary tax disclosure is stronger in societies with strict tax enforcement and societies with high tax morale. In addition, we find that the positive relationship between the presence of a CSR Committee and the level of voluntary tax disclosure is stronger in societies with weak tax enforcement and societies with high tax morale. Finally, our results suggest that board gender diversity is not related to the level of voluntary tax disclosure. Our results indicate that different types of board diversity lead to different firm outcomes and that the consequences of board governance mechanisms on firm outcome variables can only be understood considering the national context in which they are embedded.

Keywords: Tax disclosure, Corporate Governance, CSR, Employee Board Representation, Gender Diversity, Formal and Informal Institutions

Short Bio on Presenter:

Ann Jorissen (PhD) is Full Professor of Accounting at the University of Antwerp. She teaches financial and management accounting and management control at bachelor and advanced financial statement analysis and business valuation at master level. She chairs the department of Accounting and Finance of the Faculty of Business and Economics.

Her research interests relate to the field of financial reporting (the due process of standard setting), management control and corporate governance. She has published articles on these topics in international academic journals such as: Accounting, Organizations and Society; European Accounting Review; Management Accounting Research; Accounting and Business Research; Journal of Accounting and Public Policy; Accounting and Finance; Accounting in Europe; Corporate Governance: an international review; Human Relations; Entrepreneurship, Theory and Practice; Family Business Review; Journal of Small Business Management; Journal of Family Business Strategy; Management Decision; Journal of Small Business and Economic Development.

She was co-founder and co-editor of the European Accounting Review from 1992 until 1997. She is currently on the editorial boards of Accounting, Auditing and Accountability Journal; Accounting in Europe; Family Business Review and Corporate Governance: an international review.

She was President of the European Accounting Association from 2013 to 2015 and she currently chairs the EAA’s Financial Reporting Standards Committee (2020 -2026). She was a member of the High Council of the Economic Profession (Independent Supervisory Body of the Accounting and Audit Profession) in Belgium 2004 to 2013 and from 2018 untill 2024. She was a member of the IFRS Advisory Council from 2015 up until 2020 and is a member of EFRAG’s Academic Panel since 2017.