Executive Religiosity and Disclosure Tone Ambiguity of Annual Reports

Toufiq Nazrul () and Rania Mousa
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Toufiq Nazrul: Schroder Family School of Business Administration, College of Business and Engineering, University of Evansville, Evansville, IN 47722, USA
Rania Mousa: Schroder Family School of Business Administration, College of Business and Engineering, University of Evansville, Evansville, IN 47722, USA

JRFM, 2025, vol. 18, issue 2, 1-19

Abstract: This paper examines the effect of C-suite executive religiosity on the disclosure tone ambiguity of corporate annual reports. The paper utilizes executive-level religiosity, disclosure tone, and financial data from a sample of 2515 publicly listed U.S. corporations. It applies fixed-effect regression analysis to show that the presence of religious executives within the C-suite team reduces the disclosure tone ambiguity of annual reports, as evidenced by a reduction in the number of negative and uncertain words within corporate annual reports. Subsample analyses show that religious CEOs and CFOs in the C-suite primarily drive the main findings, which is consistent with their heightened control over corporate annual report preparation processes post-SOX. The main finding holds across multiple robustness tests and suggests that the individual religiosity of C-suite executives can be an important determinant of a company’s disclosure tone-related choices. By utilizing the measure of executive-level religiosity, this study directly addresses recent calls for further research to examine additional personal and psychological factors beyond executive-level narcissism and political ideology that can influence top management personnel’s corporate disclosure tone-related choices. This study contributes to the literature by examining the influence of individual executive-level religiosity on the tonal sentiment of corporate communications, as represented by corporate annual reports.

Keywords: disclosure tone ambiguity; CEO religiosity; CFO religiosity; negative tone; uncertain tone (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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