Do audit committee structure increases influence the level of voluntary corporate governance disclosures?

Abstract

PurposeThe purpose of this paper is to provide an insight into the voluntary corporate governance disclosure and AC practices among Malaysian property listed companies. Along with that, the influence of AC characteristics on voluntary corporate governance disclosure was also examined.Design/methodology/approachThe study used the content analysis of annual reports to extract voluntary corporate governance disclosures and audit committee (AC) practices. The relationship between voluntary corporate governance disclosures and AC characteristics was examined by using the panel data regression analysis.FindingsBased on the results of the study, it can be concluded that all three variables: AC size, AC independence and AC meetings are the factors that influence the level of voluntary corporate governance disclosure among sampled companies.Practical implicationsThis study provides an overview of voluntary corporate governance disclosures practices, which have shown an increasing trend of information disclosed by Malaysian listed property companies. Additionally, the AC structure was also found satisfactory with highly independent and higher number of meetings as required by Malaysian Code of Corporate Governance and Bursa Malaysia requirement.Social implicationsBy filling the gap identified in this study, investors’ confidence will boost as they will have sufficient information about the Malaysian listed property companies – resulting in strengthening competitiveness and growth by attracting local and foreign investments in the country. The influence of AC attributes over the quality of disclosure among Malaysian listed properties companies is identified, and regulators introduce more explicit rules for AC mechanism for improving the disclosure quality. The increase in the quality of information provided in the annual reports will lead toward highly efficient and transparent stock market.Originality/valueThis study has provided an insight into corporate governance of listed companies in Malaysia, which will contribute to the extended literature. Along with that, it will also provide an overview of corporate governance structure among Malaysian listed companies to the policy makers.