Women Write Better Annual Reports
Are Female CFOs Better at Improving Readability of the Annual Reports?
- Andy Kim and Sung Gon Chung
- A version of the paper can be found here.
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Is the degree of “plain English” (or readability) of the annual reports a function of CFO characteristics? Using the hand collected background information of 6,278 unique CFOs in Execucomp firms, combined with BoardEx data and the quantified readability measures of annual reports, we find supporting evidence. Other things being equal, annual reports supervised by female CFOs use less complicated words in the texts and use more detailed numerical presentation in the tables. Switching from male to female CFOs significantly reduce information asymmetry, which may suggest clearer written communication skills of the female CFOs. We also document that readability is affected by other qualifications such as CPA and MBA.
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Definitions of common statistics used in our analysis are available here (towards the bottom)