Corporate Governance Mechanisms and Web-Based Investor Relations Activities: an Empirical Examination on Companies Listed in Abu Dhabi Stock Exchange

Abstract

This study seeks to examine the relationship between Corporate Governance mechanisms and corporate web-based investor relations reporting practices of companies listed in Abu Dhabi Stock Exchange (ADX). The study draws a sample of 56 companies listed in ADX and conducted a content analysis on their websites to assess the level to which investor relations information are disclosed. Results of the content analysis showed that all companies included in the sample have a corporate websites and more than 50% disclose information related to investor relations. A multivariate regression analysis was conducted to find the relationship between 4 independent variables reflecting corporate governance mechanisms (Government ownership, Institutional ownership, Board independence, and Audit committee financial expertise) and Web-based investor relations disclosures. The results showed a significant positive relationship between Ownership structure (Government and Institutional) and Audit committee financial expertise and the degree to which companies disclose IR information on their websites. This indicates that strong corporate governance mechanisms are influencing and motivating companies to enhance and improve their disclosure activities by using a new medium (i.e. the internet) and therefore increasing the transparency and information availability to the stock market participants in emerging economies such as the UAE.

Keywords: Corporate Governance, Investor Relations, Internet Financial Reporting, Voluntary Disclosures