The Readability of Non-Financial Information. The Role of Stakeholders' Pressure in the European Setting

This study explores the factors that may explain the readability of non-financial information (NFI) disclosure through the interpretive lens of legitimacy theory. In particular, it investigates whether the readability of the NFI disclosure, prepared under Directive 2014/95/EU, is affected by the pressure of certain stakeholders and by the presence of a corporate social responsibility committee (CSRc). The sample is based on 9,218 European listed firms, covering the period 2017-2020. The results show that pressure from environmentally sensitive industries, consumers, and some investors plays a crucial role in improving the readability level of NFI, while employees and the State owner do not exercise an influence on the level of readability. In addition, the presence of a CSRc is not only relevant per se, but also acts as a moderator in enhancing the association with these stakeholders on the readability of NFI disclosure.