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The recent economic and political focus on rising income inequality and the extent of government intervention into pay policies has renewed the interest in executive compensation. The purpose of this paper is to examine the impact of changing regulatory landscapes on executive pay and its components.

This study examines a recent 23-year period divided into three distinct intervals separated by two major regulatory changes, the Sarbanes–Oxley Act (SOX) and the Dodd–Frank Act. Bonus, long-term and total compensation are separately modeled as a function of each regulatory change while controlling for firm size, performance and year. The model is estimated using panel data with firm fixed effects. An industry analysis is also conducted to examine sector variations.

Total compensation increased 29 percent following SOX and 21 percent following Dodd–Frank, above what can be explained by size, firm performance and time. Total compensation increased following both SOX and Dodd–Frank in all industries except for the financial services industry where total compensation was unchanged. Results are robust to using smaller windows around each regulation.

This study does not seek to determine whether executive compensation is at an optimal level at any point in time. Instead, this study focuses only on the change in executive compensation after two specific regulations.

The debate over the extent to which the government should intervene with executive compensation has become a frequent part of political and non-political discourse. This paper provides evidence that over the long-term, regulation does not curtail executive compensation. An important exception is that total compensation was restrained for financial services firms following the Dodd–Frank Act.

This paper aims to examine the differences in quality and quantity of disclosures dealing with greenhouse gas emissions among companies with a relatively large or small carbon footprint. It also considers whether disclosures are being included in the primary report to stakeholders (an integrated report) or in a secondary source (a sustainability report).

A comprehensive carbon disclosure checklist was constructed based on professional and academic literature to identify and categorise carbon disclosures. Quality is gauged according to a multi-dimensional assessment derived from prior research based on density of reporting, disclosure attributes, management orientation, integration of information, ease of analysis, reporting on strategy, use of independent assurance and repetition. A content analysis is used to gauge the quantity and quality of carbon disclosures of 50 companies listed on the Johannesburg Stock Exchange. Differences in the quantity and quality scores of high- and low-carbon companies are tested using a Mann–Whitney U test.

Carbon disclosures are used as part of a legitimacy management exercise. This involves not just the use of additional environmental disclosure to placate stakeholders as environmental impact grows. The quality of reporting and location of disclosures are, perhaps, more important for understanding how companies are responding to stakeholder expectations for reporting on carbon emissions and climate change.

Despite mounting scientific evidence on the risks posed by climate changes, companies remain reluctant to commit to high-quality reporting on specific steps being taken to reduce carbon emissions. Even when disclosures are being targeted at key stakeholders, the possibility of impression management remains. It may, therefore, be necessary to have carbon reporting regulated and independently assured. More guidance on how companies should be managing and reporting on carbon emissions and climate change may also be required.

Despite mounting scientific evidence on the risks posed by climate changes, companies remain reluctant to commit to high-quality reporting on specific steps being taken to reduce carbon emissions. Even when disclosures are being targeted at key stakeholders, the possibility of impression management remains. It may, therefore, be necessary to have carbon reporting regulated and independently assured. More guidance on how companies should be managing and reporting on carbon emissions and climate change may also be required.

The study merges the traditional approach of focusing on the quantity of disclosures to illustrate the application of legitimacy theory in a sustainability/integrated reporting setting with less-seldom-studied quality and location of reporting. This result provides a more nuanced perspective of how carbon disclosures are being used to manage stakeholders’ reporting expectations.

Traditional methods of assurance outlined by current professional standards are risk-based models where the emphasis is on the veracity of published data rather than on the rigour of the interpretation or analysis of information provided to users. As such, they are not well suited for expressing an opinion on qualitative, subjective or forward-looking assessments typically included in integrated reports. In this context, the purpose of this paper is to describe an alternate approach to assurance and identifies the initial elements of an “interpretive assurance model”.

The research is exploratory/interpretive. It relies on detailed interviews with experienced auditors and preparers to develop an initial approach for providing some level of assurance over an integrated report.

The research identifies elements of an interpretive assurance model which focusses on providing assurance on the interpretation and analysis of information included in an integrated report rather than on underlying data. These include an examination of the completeness of the explanation of the value creation process provided in an integrated report; the methods used to support management discussion and analysis; and the reasonability of the review process used to ensure the reliability of qualitative, subjective and forward-looking representations contained in an integrated report.

The study is conducted in a South African setting. While limiting the study to a single jurisdiction may be seen as a limitation, local preparers and auditors have had at least five years of experience with the application of an integrated reporting framework and are in a strong position to provide detailed insights.

An interpretive assurance model shifts the focus from objective verification of data using defined test procedures to evaluation of the interpretation and analysis process used to prepare an integrated report. Application of the proposed model will require practitioners and auditing students to be trained extensively in qualitative analytical techniques. The inherent complexity of contemporary business models and the multi-dimensional focus of integrated reports will also result in changes in the composition of audit teams which are currently dominated by experts in financial reporting rather than integrated or strategic business management.

The paper is the first to offer a practical approach for providing assurance over an integrated report. It responds to calls form the International Integrated Reporting Council and International Auditing and Assurance Standards Board for more innovative assurance models for addressing the reporting needs of contemporary organisations.