Impression management observation in chairman statements in JSE Top 40 listed companies.
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Date
2021
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Abstract
The study examined whether impression management exists in the Top 40 Johannesburg Stock Exchange (JSE) listed companies based on narrative disclosure in chairman’s statements. Based on market share, the JSE Top 40 listed companies represent more than 80% of the market share of all companies listed on the JSE, and the chairman’s statement is regarded as one of the most read portions although it is not required by the International Financial Reporting Standards (IFRS). Content analysis was used to analyse integrated reports of the JSE Top 40 listed companies. The reports constituted the data of the study. Impression management was examined from the length of the chairman’s statement, use of passive sentences, use of personal reference, and the sentiment shown in disclosure tone. The study shows that the JSE Top 40 listed companies partake in impression management. Furthermore, unprofitable companies used more personal references than profitable companies did, whereas profitable companies used more positive sentiments than unprofitable companies. The study provides insight on selective voluntary disclosure tactics used by management of the JSE Top 40 listed companies in the quest for legitimacy. The study also adds to the discourse on corporate reporting by public companies and to debates within the legitimacy theory.
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Masters Degree. University of KwaZulu-Natal, Durban.