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Research Publications (Accounting and Informatics)

Permanent URI for this collectionhttp://ir-dev.dut.ac.za/handle/10321/212

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Author: search.filters.author.Marimuthu, FerinaSubject: search.filters.subject.Financial performance

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    The role of environmental disclosures in enhancing firm value : evidence from listed manufacturing firms
    (International Institute for Science, Technology and Education, 2023-01) Mgilane, Nolwando L.; Maama, Haruna; Marimuthu, Ferina
    The traditional approach to financial performance reporting has experienced a significant shift as stakeholders increasingly demand greater transparency regarding firms' environmental and social impact. This has elevated the importance of environmental reporting due to its potential influence on firms' financial strength. This study investigates the relationship between environmental reporting and the value of manufacturing firms listed on the Johannesburg Stock Exchange (JSE) in South Africa. The study conducted a content analysis on 250 annual integrated reports from 50 manufacturing firms listed on the JSE between 2016 and 2020 and utilized a multiple regression analysis. The findings revealed a negative relationship between environmental reporting and firm value, suggesting that adopting environmental reporting may involve additional financial resources, which are perceived as an outflow of funds in an economic context. Consequently, this study recommends that manufacturing companies analyse their stakeholders' characteristics and information needs to present relevant environmental reporting in their annual integrated reports. By doing so, companies can enhance their legitimacy with stakeholders, maximise shareholder value, and ultimately increase firm value. This research contributes to the existing literature on environmental, social, and financial reporting, particularly in South Africa, by focusing specifically on manufacturing firms listed on the JSE.
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    Impact of environmental disclosure on financial health of manufacturing firms
    (Cosmos S.A., 2023) Marimuthu, Ferina; Mgilane, Nolwando; Maama, Haruna
    Environmental reporting can help firms stay in compliance with environmental regulations and manage environmental risks. By proactively addressing and disclosing their environmental impact, manufacturing firms can mitigate potential legal and regulatory penalties, fines, and reputation damage, thereby safeguarding their financial performance. In addition to the latter perspective, cost savings and operational efficiency, enhanced reputation and stakeholder engagement, as well as access to capital and investment opportunities, are critical factors to ensure that firms disclose information about their environmental performance, including its impact on the environment, sustainability initiatives, and environmental risks and opportunities to ensure that they maximise their financial performance. Hence, the aim of this study is to explore the relationship between environmental reporting and financial performance of South African listed manufacturing firms. A multiple regression analysis was adopted to achieve the aim by testing the relationship between the variables amongst a sample of 50 manufacturing firms listed on the Johannesburg Stock Exchange (JSE). A content analysis was utilized to attain environmental reporting information themes from the integrated annual reports retrieved from the JSE for the period 2016 to 2020. The results indicate a negative association between environmental reporting responsibility and financial performance, measured by return on equity (ROE) when the components of environmental reporting are tested individually. However, when these components namely: environmental reporting, social reporting and environmental degradation are combined the findings reveal a positive and statistically significant relationship. These results imply that the adoption of environmental reporting, specifically an increase on the quality of environmental reporting results in an increase in the manufacturing firm performance.
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    The relationship between executive remuneration and financial performance in South African state-owned entities
    (Allied Business Academies, 2019-01-01) Marimuthu, Ferina; Kwenda, Farai
    This study aimed to determine whether executive remuneration levels at poorly performing state-owned entities (SOE)s in South Africa are justified. The study was motivated by the weak economic growth, fiscal consolidation, increased debt levels and poor financial performance of these entities. Dynamic panel data models were employed and estimated using the Generalised Method of Moments (GMM) estimator. The data set comprised an unbalanced panel data of 33 commercial SOEs in South Africa that are listed under the Public Financial Management Act. The study found an inverse relationship between executive remuneration and financial performance. This is of concern as executive remuneration is high despite the SOEs' declining performance. The misalignment between pay and performance undermines the core principles of the agency theory, resulting in poor performance. These findings provide empirical support for public and media perceptions that executive remuneration is excessive and unmerited when measured against SOEs' performance. The findings will be of interest to observers of the economy, as they measure SOEs' capacity to play a leading role in investment and in improving the efficiency of the economy. They could also inform decision making and policy development on SOEs.