This Doctorate of Business Administration (DBA) thesis is an exploration of the influence of cognitive communication factors (CCFs) on the preparation of financial narrative board reports. Internal communication of financial information to boards is a key element of corporate governance. Literature is reviewed relating to financial communication for governance and cognitive factors influencing communication. Drawing from this communications literature, the researcher proposes that a number of factors have the potential to affect or influence, often unconsciously, the judgement of managers preparing internal financial board reports. The research objective is to explore these factors and gain a better understanding as to whether such factors give cause for concern. Given the subjective nature of the topic, a qualitative research approach was chosen, using semi-structured interviews and thematic analysis of the data. Interviews with 24 senior finance executives, from a range of industry sectors, were conducted. This study provides new insights into the CCFs that influence the preparation of financial narrative board reports. It is found that communication between management and non-executive directors is facilitated and influenced by a range of factors including: common ground and shared intentionality; the curse of knowledge and knowledge illusion; intuition; perception; and context. Some of these CCFs are considered necessary for good communication and have a positive effect; the effect of others can be either positive or negative depending on circumstances. The study culminates with a model illustrating the influence web of these CCFs. If management are unaware of these factors, or have not considered them, the result can be an unconscious effect on their judgement regarding what information to provide to directors and how to present it. An enhanced awareness and understanding of these factors, and how they interact, should lead to improvements in practice in the preparation of board reports and the overall communication between management and non-executive directors. This research study provides insights and recommendations of interest to all those involved in internal financial board reporting, making a contribution to both academic knowledge and the practice of financial reporting and corporate governance.
|Publication status||Unpublished - 2020|
- Reporting, Cognitive communication