This paper aims to analyze the determinants of the readability non-financial disclosure prepared under the Directive 2014/95/EU in the agrifood and beverage sector.
To reach this goal, an ordinary least squares (OLS) regression model is proposed employing readability and governance variables. The sample is based on European agrifood and beverage listed firms that exceeding 500 employees and are considered public interest entities, including 744 firm-year-observations from 2017, first year after the Directive entered in force, to 2020, last year available.
The authors' results suggest the importance of corporate governance mechanisms as drivers in reaching more readability of non-financial information.
This study provides useful suggestions to policy makers and managers for a better understanding of the role played by some factors on non-financial information (NFI) readability. Moreover, findings may help regulators in confirming that the establishment of a Corporate Social Responsibility (CSR) committee is a step in the right direction to strengthening firms' NFI readability. Lastly, this is beneficial for auditors and preparers who will pay more attention to the internal factors that can push for more (or less) understandability of NFI.
This research contributes to the academic and practical debate because it adds new insights into the literature on NFI readability and represents fertile area for future researches.
