Who drives transparency? Examining the role of pay, power and people in remuneration governance disclosure

Abstract

Orientation: This study investigates the structural and behavioural determinants of remuneration governance disclosure (RGD) among Johannesburg Stock Exchange (JSE)-listed firms. It frames pay (incentive remuneration) as a behavioural driver, power (board characteristics) as a structural mechanism, and people (ownership structures) as embodying both roles.
Research purpose: The study examines the impact of executive remuneration structures, board dynamics and ownership patterns on RGD, providing insights into transparency practices within JSE-listed firms.
Motivation for the study: The motivation stems from growing concerns over corporate transparency and accountability in emerging markets, particularly in South Africa, where governance and disclosure are critical for mitigating information symmetry and enhancing stakeholder confidence.
Research approach/design and method: The study employs a cross-sectional analysis of firm-level data from JSE-listed firms for the 2023 financial year. Descriptive statistics and multiple regression were used to assess the influence of incentive-based remuneration, board characteristics, and ownership structures on RGD.
Main findings: Firms with higher levels of incentive-based executive remuneration, larger board sizes and greater institutional ownership are associated with significantly enhanced RGDs. This highlights the critical role of incentive alignment, governance architecture and ownership oversight in shaping corporate disclosure behaviour.
Practical/managerial implications: Policymakers and regulatory bodies may consider strengthening RGD frameworks to bolster investor trust and ethical governance across South Africa and comparable jurisdictions.
Contribution/value-add: This study contributes to the literature by investigating how pay, power and people influence remuneration disclosure outcomes, advancing understanding of the governance mechanisms that drive transparency.