Content and Design of Corporate Governance Web Sites

Web sites are useful resources for communicating corporate governance information to stakeholders. They facilitate timely information disclosures, which leads to greater transparency and can help to improve investor perceptions. Positive perceptions, in turn, have the potential to boost a firm's performance. In this study, we develop a descriptive framework of governance content and web site design features, and use it to evaluate web sites of companies in the SP 100 in order to determine differences among various sectors as well as companies with different corporate governance quotients (CGQ), a measure of effective governance assigned by Institutional Shareholder Services (ISS). Results indicate that there are significant differences in how the content is presented despite companies across sectors having standardized the type of content they provide. On the whole, manufacturing and technology sectors display more content. Likewise, these two sectors also appear to use more advanced design elements than finance, health care and services, with several significantly different features. Contrary to our expectation, very few features are significantly different in both content and design across the two CGQ groups though content provides slightly more variance. The study findings suggest that companies can vastly improve their web sites by including more content reflective of due diligence and transparency and by implementing Web 2.0 and other advanced technologies. Companies serious about transparency will adopt a more strategic approach to web content and design. The lists of content and design features identified here can serve as checklists/templates for executives' intent on further enhancing their web design and content.