Disclosure and transparency in corporate governance codes - comparative analysis with prior literature findings

Abstract

The purpose of this study is to compare our empirical findings related to the level of disclosure ensured by corporate governance codes in force in European Union member states, by referring in this respect to OECD principles, with prior related research results. The comparative analysis is justified by the fact that our paper approached corporate governance form transparency and disclosure perspective, using other framework for comparison and a different methodology for measuring the disclosure level (Jaccard's similarity coefficient) than those used in previous studies (Latent Semantic Analysis technique or the Leximetric one). The comparative analysis performed considered various features of corporate governance codes already studied, such as their issuer type or country's legal regime. The research methodology used for achieving our goal is based on econometric analysis using various statistical tools, like descriptive analysis, mainly based on computing means, and correlations for identifying the relationship between our results and those of others researchers. The results of the performed analysis reveal that our empirical results, providing a disclosure index developed for all European Union member states, are not consistent with prior research findings related to disclosure as “primary theme” of corporate governance codes. On the other hand, by analysis these codes considering their issuer type we have reached to the same conclusion as other researchers interested on this same topic. Thus, those codes issued in collaboration of several institutions, coming from various economic fields, reached the highest level of disclosure, while those developed by industry or trade associations and groups proved to be the less interested in transparency. Similar was the conclusion reached after comparing the level of disclosure in corporate governance codes by grouping them according to countries’ legal regimes. The most relevant result in this respect is that Common law regime ensures the highest level of transparency through corporate governance requirements. Finally, we can assert that the compliance of corporate governance codes with OECD principles is consistent with prior research findings related to disclosure considering codes’ issuer type and countries’ legal regime.