Investigating Digital Corporate Reporting from an Upper Echelons Theory Perspective: Evidence from the Arab Middle East

Utilising the insights of Upper Echelons Theory (UET) and bounded rationality assumption, this original study aimed to investigate the association between corporate leaders’ characteristics and both the extent and readability of Digital Corporate Reporting (DCR). Content analysis of corporate websites of 122 publicly listed Jordananian firms has been carried out. The logistics regression analysis revealed that maintaining a functioning corporate website is inversely associated with CEO age. This indicates that younger CEOs are more likely to retain a web presence for the firm than their older counterparts. The OLS regression analysis revealed that CEOs’ education and tenure were negatively associated with the extent of DCR. Moreover, it was found that Corporate Governance (CG) moderating variables hardly lessen this relationship. The results confirm the current thoughts regarding the rise of CEO effects in corporations with unique evidence from the Arab Middle East (AME). Building on the previous evidence, the study also aimed at uncovering the association between chairman characteristics and the readability of the digital version of the chairman’s Letter to Shareholders (LTS). A hand-built dataset from a sample of 379 LTS from 101 publicly listed firms in 7 AME countries over five years (2014 – 2018) were employed to achieve this objective. Focusing on the clarity of DCR, the results of this second part of this study emphasizes the potential of UET to provide incremental plausible explanations of the variance in the levels of readability of LTS. The clustered regression results of the panel data demonstrate that older and less educated chairpersons are associated with more readable disclosures. Such findings on disclosure styles demonstrate the power of individuals in positions of authority as a consequence of higher education and tenure. Such findings contribute to the evolving inquiry on the significance of readability for enhancing corporate disclosure transparency and have implications for improving the DCR extent and readability.