Research & Projects

Integrated Reporting, Sustainability Reporting & Assurance

After the most recent financial crisis 2008-9, there has been a decline in trust of stakeholders in capital-market oriented reporting by corporations. As a result, traditional financial reporting should be complemented by corporate sustainability reporting, which would ideally be unified into integrated reporting.

While there has been considerable empirical research into CSR reporting, this is not yet the case for integrated reporting in the 2013-framework published by the International Integrated Reporting Council (IIRC). This research project examines the content elements investors demand and their relationship to the quality of integrated reporting in the German capital market.

Selected publications:

  • Ger­wan­ski, J./Kord­sa­chia, O./Vel­te, P. (2019). Determinants of Materiality Disclosure Quality in Integrated Reporting: Empirical Evidence from an International Setting. Busi­ness Stra­te­gy and the En­vi­ron­ment (forth­co­m­ing).
  • Velte, P. (2018). Is audit committee expertise connected with increased readability of integrated reports? Evidence from EU companies. Problems and Perspectives in Management16: 23-41.
  • Buhleier, C./Kajüter, P./Müller, S./Scheffler, E./Velte, P./Weber, S. (2017). Diversity Reporting als Bestandteil des Corporate Governance Reportings. Zeitschrift für betriebswirtschaftliche Forschung (zfbF), Sonderheft 72/17: 355-373
  • Velte, P. und Stawinoga, M. (2017). Integrated reporting: The current state of empirical research, limitations and future research implications. Journal of Management Control 28: 275-320

Sustainable investors & ESG performance

Research towards sustainable financing and investing seeks to align the economic, social, and ecologic impact of corporate actions by emphasizing the relevance of a triple bottom line approach. Particularly after the financial crisis 2008/09, regulators, financial intermediaries, company executives, and further stakeholders are increasingly interested in the interdependencies between financial and non-financial performance of companies.

This research projects investigates the determinants of a more sustainable global financial system. Specifically, a major impetus is to understand the relevance of socially responsible investments (SRI) on corporate behavior.

There is a strong trend towards SRI in the private sector. Voluntary signatories to the United Nations-supported Principles for Responsible Investments (UN PRI) managed 68.4 trillion US-Dollar in assets in 2017. More institutional investors are incorporating ESG (Environmental, Social, and Governmental) issues into investment analysis and decision-making processes. In that regard, this project aims to understand the impact of SRI on the quality of non-financial disclosure and the economic performance of companies.

In March 2018, the European Commission adopted the action plan for financing sustainable growth drafted by the High-Level Expert Group (HLEG) on Sustainable Finance. The main objective of the European Commission is the reorientation of capital flows towards sustainable investments. In combination with the strong trend towards SRI in the private sector, this can lead to systemic changes in the European financial system, which substantiates the actuality and relevance of this research topic.   

Board Composition & (Gender) Diversity

Recently there have been a large number of reform efforts aiming at improving corporate performance by increasing board diversity. In addition to introducing the legal gender quota now at the focus of much political discussion, other diversity characteristics such as ethnicity or occupation, board independence and expertise are increasingly being studied in empirical research on corporate governance from an international viewpoint.

This research project board composition looks at the one tier and two tier system of corporate governance in Europe and studies the effects on the capital market.

Selected publications:

  • Velte, P. (2018). Does Gender diversity in the audit committee influence key audit matters’ readability in the audit report? UK Evidence. Corporate Social Responsibility and Environmental Management 25: 748-755.
  • Velte, P. (2018). Appointing female CEOs in risky and precarious firm circumstances. A review of the glass cliff phenomenon. Corporate ownership & control 15: 33-43.
  • Velte, P. (2017). Do women on board of directors have an impact on corporate governance quality and firm performance? A literature review. International Journal of Sustainable Strategic Management 5: 302-346.
  • Velte, P. (2017). Does board composition have an impact on CSR reporting? Problems and Perspectives in Management 15: 19-35.

Sustainable CEO Compensation

As a part of company’s corporate governance policy management board compensation systems should ensure the orientation of management decisions on the long-term sustainable development of the company and help restoring stakeholder confidence in corporate management that has been decimated by the recent financial and economic crisis.

Despite of a plethora of empirical studies on the issues of executive pay, the scientific discussion is characterized by the plurality of research approaches and a lack of an interdisciplinary consensus on the relevant impact factors.

This research project examines the design and incentive effects of CEO compensation systems and focuses on the comparative study of the relevant causal effects in terms of sustainable corporate performance.

Selected publications:

  • Winschel, J. and Stawinoga, M. 2019. Determinants and effects of sustainable CEO compensation: a structured literature review of empirical evidence. Management Review Quarterly (online first).
  • Velte, P./Weber, S./Lentfer, T. (2018). Weiterentwicklung der Vorstandsvergütungssysteme im Rahmen der Sustainable Corporate Governance, Velte, P., Müller, S., Weber, S., Sassen, R. & Mammen, A. (eds), Rechnungslegung, Steuern, Corporate Governance, Wirtschaftsprüfung und Controlling. Berlin.
  • Velte, P. (2016). Sustainable management compensation and ESG performance. The German case. Problems and Perspectives in Management 14: 17-24.

Extended auditor reporting (Key Audit Matters)

As a reaction to the financial crisis 2008/09, auditor reporting was extended from an international perspective to increase audit quality by public interest entities (PIEs). The audit opion was complemented by key audit matters (KAM) in the European member states. The aim of this regulatory instrument was to decrease the expectation gap between management and capital market. Investors and other stakeholder groups should hain more firm specific information about the conduction of external audit.
The following research project "extended auditor reporting (expectation gap)" analyses from an empirical view, if this increased auditor reporting leads to a better audit quality in fact and in appearance from a national and international perspective.

Selected publications:

  • Velte, P. (2018). Does Gender diversity in the audit committee influence key audit matters’ readability in the audit report? UK Evidence. Corporate Social Responsibility and Environmental Management 25: 748-755.

Say-on-Pay in the German two-tier system

The compensation of executives is an extensive and partially controversial discussion within the academic as well as novel literature. Several countries introduced so called ‘Say-on-Pay’ votes in order to reduce the perceived ‘excessive’ compensation of chief executive officers in listed corporations and to align the interests of shareholder and manager.

Say-on-Pay refers to a regulation which enables shareholders to vote on the appropriateness of executive compensation during the annual general meeting of the firm. Even though the vote itself is usually non-binding, first research results suggest that higher rates of voting dissent lead to changes in the level and structure of management remuneration.


Within this research project the factors which drive the board to schedule a voluntary Say-on-Pay vote during the annual general meeting are examined. Thereafter, the reasons for shareholders’ dissent are analysed and its effect on executive remuneration estimated.

The project is focused on the German capital market. This capital market provides a natural experiment due to the dual board system and voluntary Say-on-Pay votes.

Selected publications:

  • Obermann, J. & Velte, P. (2018).  Determinants and Consequences of Executive Compensation-Related Shareholder Activism and Say-on-Pay Votes: A Literature Review and Research Agenda. Journal of Accounting Literature 40: 116-151.
  • Obermann, J. (2018). Can management-sponsored non-binding remuneration votes shape the executive compensation structure? Evidence from Say-on-Pay votes in Germany. The European Journal of Finance 24: 1609-1630.

Fair Value Accounting, Earnings Management and Corporate Governance

Fair Value Accounting has reached the spotlight in the field of recognition and valuation of assets and liabilities in the international empirical accounting research. By implementing IFRS 13 the standard setter has introduced the fair value hierarchy, which categorises fair values into three levels.

Critics question the objectivity of the valuation, especially in the case of third level fair values which are based on internal calculations. Recent studies have shown that third level fair values are less relevant to investors. However, the impact of corporate governance variables (e.g. board gender diversity) on the fair value valuation and the associated notes has not been examined in detail. Furthermore, the effect of third level fair values on the quality of external audit has not been answered in the empirical literature.

In the lights of the above, the research project will focus on the one hand on the analysis of the association of certain corporate governance factors with fair value accounting and on the other hand on the impact of fair values on audit quality.

Selected publications:

  • Velte, P. (2017). Do women on management board increase fair value relevance? Corporate Governance and Sustainability Review 1: 6-16

Assessing the association between joint audits, audit quality and corporate governance

Public interest entities are subject to mandatory financial audits in most countries with usually a single audit scheme. Other possible audit schemes are joint audits. In joint audits, two separate audit firms are appointed by a company and they must express a joint opinion on the financial statements. Only in France joint audits are mandatory for all public interest entities since 1966. Denmark had a mandatory joint audit regime until 2004. Other countries allow firms to voluntarily choose a joint audit, e.g. Germany.

Research regarding joint audit mainly focusses on financial reporting quality, audit quality and audit costs. This research project aims to address the lack consideration of corporate governance on the choice of auditors, while specifically focusing on the link between joint audits, audit quality and audit committees. Due to the recent Wirecard discussion, this is increasingly relevant. Audit committees are responsible for mandating the auditors, communicating with the auditors during the audit and receiving the auditor’s report. Therefore, the role of the audit committee in a joint audit regime needs to be investigated.