CEO Power, Integrated Reporting Quality, and Firm Value in South Africa

This study investigates the relationship between chief executive officer (CEO) power, integrated reporting (IR) quality, and firm value among Johannesburg Stock Exchange (JSE)-listed companies in South Africa over the period 2015–2023. Drawing on agency theory, stewardship theory, and stakeholder theory, the study examines the direct effects of integrated reporting quality and CEO power on firm value, as well as the moderating effect of CEO power on the relationship between integrated reporting quality and firm value. CEO power is operationalised as a composite index comprising structural, ownership, prestige, and expert dimensions. Using a balanced panel dataset of 80 JSE-listed companies across ten sectors and employing the two-step System Generalised Method of Moments (System GMM) estimator to address potential endogeneity, the findings reveal that higher integrated reporting quality is positively and significantly associated with firm value, measured by Tobin's Q and Return on Assets (ROA). Conversely, CEO power is negatively associated with firm value and significantly weakens the positive relationship between integrated reporting quality and firm value. These findings demonstrate that the value relevance of integrated reporting depends not only on disclosure quality but also on the governance environment within which disclosures are produced. The study contributes to the growing literature on integrated reporting and corporate governance by providing empirical evidence from an emerging market and highlighting CEO power as an important governance mechanism influencing the effectiveness of integrated reporting. The findings have practical implications for regulators, boards of directors, institutional investors, and policymakers seeking to strengthen corporate governance and enhance the credibility and value relevance of integrated reporting in South Africa and other emerging economies.