THE TONE OF ANNUAL REPORTS AS A STRATEGIC PERFORMANCE MANAGEMENT TOOL: APPLICATION ON TURKEY’S BORSA ISTANBUL CORPORATE GOVERNANCE INDEX FIRMS

Year 2016, , 209 - 221, 30.09.2016

Eyup Kahveci

https://doi.org/10.17261/Pressacademia.2016321989

Abstract

The annual reports have been identified as
one of the key corporate governance practice. If these reports are genuinely
being prepared in an attempt to improve the clarity of communication with
stakeholders, and give related and necessary information accurately to them,
then they become one of the strategic tools affecting performance positively.
Therefore, in this study, we aimed a semantic examination of the English
versions of annual reports from companies quoted on Borsa Istanbul included in
the Corporate Governance Index to see whether the annual reports' tone has an
impact on company performance. With this aim, the contents of 2014 annual
reports are analyzed by the text-analysis software package Diction 7 and scores
for accomplishment, cooperation, activity and optimism are obtained. Efficiency
scores are calculated by Data Envelopment Analysis to evaluate to what extent
annual reports’ tone and corporate governance ratings impact on company
performance. The results show that the annual reports' tone and corporate
governance ratings have a significant positive impact on efficiency scores, so
on performances of companies.

Keywords

Corporate governance, DEA efficiency, annual reports, content analysis

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