Assurance on Corporate Governance Reports in Spain

What is it about?

Financial scandals have highlighted the need for greater corporate transparency. Thus,corporate governance has emerged as an instrument for corporations to fulfil their social responsibilityby offering more reliable information to their stakeholders. In this sense, the corporate governancereport has become one of the leading mechanisms of business reporting to attend the growing needfor reliable information by users. External and independent assurance of corporate governancereports is a tool to reduce potential risk derived from malpractices. However, within the Spanishcontext, there is a few number of listed companies who assure their corporate governance reports,and some of them have been shaken by corporate malpractices and financial scandals. This worktries to offer a critical appraisal of current corporate governance of assurance statements in Spain,developing a research strategy based on the case-study. Thus, by analysing assurance on corporategovernance reports in three Spanish listed companies, we identify strengths and weaknesses ofan unusual assurance process. Obviously, because of the recent scandals occurred in the analysedcompanies, we raise a particular concern about the potential managerial capture of this activity.Without real changes in governance mechanisms, the corporate governance assurance could amountto little more than a public relations activity.

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