An Analysis of the Readability of the Chairman’s Statement in South Africa

Sinethemba Mankayi (), Frank Ranganai Matenda and Mabutho Sibanda
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Sinethemba Mankayi: School of Accounting, Economics and Finance, University of KwaZulu-Natal, Westville Campus, University Road, Westville, Private Bag X54001, Durban 4000, South Africa
Frank Ranganai Matenda: School of Accounting, Economics and Finance, University of KwaZulu-Natal, Westville Campus, University Road, Westville, Private Bag X54001, Durban 4000, South Africa
Mabutho Sibanda: School of Accounting, Economics and Finance, University of KwaZulu-Natal, Westville Campus, University Road, Westville, Private Bag X54001, Durban 4000, South Africa

Risks, 2023, vol. 11, issue 3, 1-15

Abstract: Board members and the chairman of the board must provide shareholders and other stakeholders with annual reports that include the chairman’s statement. The statement provides an important message to stakeholders concerning financial performance, non-financial information and future outlook of the company. Stakeholders are concerned about the transparency and usefulness of the disclosed as this would have an impact on whether the chairman’s message is readable or not. The purpose of this study is to evaluate whether messages from the chairman of the board are readable or not. A sample of 40 Johannesburg Stock Exchange listed companies, for the financial period ending 2021, was selected to meet the study objectives. The Gunning Fog Index (Fog index) was applied to assess the readability of the chairman’s statement. The study found that it was difficult to read the chairman’s statements for the selected corporations and South African companies.

Keywords: chairman’s statement; readability; fog index; JSE (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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