The readability of CEO and Board Chair statements of JSE-listed mining companies in South Africa: The role of Women Directors and the narrative tone

Abstract

Demographic attributes (e.g., gender differences) and reporting style (e.g., narrative tone) have consequences on the CEO and board chair’s statements in conveying the message to stakeholders. Other strands of the literature suggest significant differences in the effectiveness of statements written by women compared to those written by their male counterparts. These statements can be used to convey to stakeholders the entities' financial health and performance, growth prospects, sustainability efforts, and environmental factors. This paper examines the influence of the presence of women directors on the board and tone on the readability of CEO and Board Chair statements. The study analysed 136 firm-year reports from 17 JSE-listed mining companies covering the period 2014-2021, from which 272 board chair and CEO statements were extracted for textual analysis using Partial Least Squares structural equation modelling (PLS-SEM). The WD and the tone were found to be significantly and positively influencing the readability of the statements with respective coefficients of (β = .420, t-statistic = 5.316) and (β = .398, t-statistic = 6.926). The results imply that the presence of women on the boards improves transparency in reporting quality. Further, the tone in the statements can have consequences in that long and poorly written statements are less engaging, thus affecting their readability. The results align with the previous literature that argues in favour of gender-diverse boards and their association with tone and readability.