Date of Publication : February

Abstract: The process of corporate governance depends on narrative disclosures as its essential element yet existing theoretical frameworks study only scripted one-way communication methods. The research presents a process-based framework which enables the implementation of Real-Time Governance Signaling during Annual General Meetings (AGMs). Our research presents the AGM as an essential institutionalized environment which serves as a disclosure platform that produces different results from analyst-mediated earnings calls because of its legal requirements and diverse stakeholder presence. The governance pressure which organizations experience, leads to two different types of executive narrative conduct, which manifest through Managerial Tone and Linguistic Strategy. The interactive format of AGMs displays tonal changes that occur during meetings as a conditional proof of accountability, which differs from the fixed nature of scripted reports. The research demonstrates that companies with inadequate oversight mechanisms will use deceptive tactics when public scrutiny increases, which market participants will perceive as signs of agency risk. The research establishes a method to assess unscripted executive responses through advanced NLP techniques, which develop a dialogic system for accountability, that determines its impact on equity capital costs.

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