Which characteristics determine the quality of corporate governance reporting? Concepts, reporting practices and empirical evidence from Germany

Abstract

This study examines the factors influencing the quality of corporate governance reporting by listed German companies. Additionally, we analyse the development of corporate governance reporting practices in Germany over a three-year observation period. Using panel data regressions, we analyse the relationship between various corporate characteristics, performance characteristics, and corporate governance characteristics and the quality of corporate governance reporting. We quantify the reporting quality using a scoring model for the largest listed German companies in the period 2016-2018. Our results indicate that the quality of corporate governance reporting has improved steadily in recent years. This trend, however, should not detract from the fact that the quality of corporate governance reporting is dependent on corporate characteristics but not on firm performance, nor corporate governance characteristics. Our empirical findings elucidate these relationships.