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Board diversity and earnings news dissemination on Twitter in the UK

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Abstract

We examine corporate adoption of Twitter by UK firms and provide the first empirical evidence on the association between board diversity, as measured by the proportion of foreign and women directors, and the decision to disseminate news in general and earnings news in particular through Twitter. We measure social media dissemination by tracing Twitter posts (tweets) by UK firms between 2013 and 2015. Utilizing the unique data by Spencer and Stuart on board characteristics, we investigate the relationship between diversity and earnings dissemination in top 150 UK companies between 2013 and 2015. We find that our board diversity measures are positively associated with using Twitter to disseminate earnings at least once, with the frequency of using Twitter to disseminate quarterly earnings, and with the number of tweets disseminating financial information. We also provide evidence that the presence of foreign directors is associated with earlier adoption of Twitter as an information dissemination channel. The results are robust to controlling for firm-level characteristics, other board structure variables, and industry and year-fixed effects. Additionally, we show that firms audited by Big Four auditors are more likely to use Twitter to disseminate earnings information. Our findings show the importance of diverse boards in using Twitter as an alternative or additional information dissemination channel.

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Notes

  1. Jung et al. (2017) reported that the number of financial firms that use social media to disseminate information is higher than in other industries.

  2. In an additional (non-tabulated) test, we checked whether observations from technology-related industries were biasing our findings. We found that our results are not sensitive to the inclusion or exclusion of firm-year observations from such industries.

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Acknowledgements

We appreciate helpful comments from Lino Cinquini (the editor) and two anonymous reviewers. We thank Reem El-Sherif, Nadia Hammad and Mostafa Kamel for their excellent research assistance. All remaining errors are ours.

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Authors and Affiliations

  1. Faculty of Business, Economic and Political Science, The British University in Egypt, Cairo, Egypt

    Ahmed Ayman

  2. Olayan School of Business, The American University of Beirut (AUB), PO Box 11-0236, Riad El Solh, 1107 2020, Beirut, Lebanon

    Moataz El-Helaly

  3. School of Business, The American University in Cairo, Cairo, Egypt

    Nermeen Shehata

Authors
  1. Ahmed Ayman
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  2. Moataz El-Helaly
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  3. Nermeen Shehata
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Correspondence to Moataz El-Helaly.

Appendix: Verification of official corporate Twitter accounts

Appendix: Verification of official corporate Twitter accounts

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Ayman, A., El-Helaly, M. & Shehata, N. Board diversity and earnings news dissemination on Twitter in the UK. J Manag Gov 23, 715–734 (2019). https://doi.org/10.1007/s10997-018-9441-9

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  • DOI: https://doi.org/10.1007/s10997-018-9441-9

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