Abstract
The purpose of this study is to examine the influence of different corporate governance (CG) attributes on voluntary disclosures (VD) made by 100 companies listed on the Bombay Stock Exchange (BSE) in their annual reports. To this end, the paper uses appropriate panel data regression technique, whereby the results indicate that three CG attributes—board independence, board gender diversity, and its risk management committee—have significant influence on VD. In particular, board independence is found to have weak negative influence on VD while its gender diversity and risk management committee indicate strong positive influence on VD. The other CG attributes, specifically the board size, role duality, ownership concentration, audit committee independence, and nomination and remuneration committees, do not reveal any significant influence on VD. Overall, the finding suggests that one of the conventional attributes of CG, i.e. board independence, acts with VD as an alternate control mechanism to reduce agency costs and protect investor interests. Meanwhile, VD co-exists with some of the latest CG attributes, including board gender diversity and its risk management committee, to monitor managers. The results of this paper should be relevant to regulators, practitioners, and other market participants in the Indian context, as well as other emerging markets with similar institutional settings.
Highlights
In view of information asymmetries in the capital market, voluntary disclosure (VD) is often used by managers, over and above what is required by regulations (Healy & Palepu, 2001; Morris & Tronnes, 2018)
The remaining corporate governance (CG) attributes such as board size, role duality, ownership concentration, audit committee independence and nomination and remuneration committee does not have any significant influence on VD
In terms of Ownership Concentration (OC), the average percentage of shares owned by majority shareholders is 91.81 percent indicating that sample firms have highly concentrated ownership structure
Summary
In view of information asymmetries in the capital market, voluntary disclosure (VD) is often used by managers, over and above what is required by regulations (Healy & Palepu, 2001; Morris & Tronnes, 2018). Agency Theory states that both CG and VD can be used as control mechanisms in mitigating agency costs arising from separation of ownership and management (Jensen & Meckling, 1976). Effectiveness of both the control mechanisms is supported by literature (Ahmed & Courtis, 1999; Erhardt et al, 2003). Literature lacks empirical evidence on the relationship between CG and VD in Indian context with the exception of Hossain & Reaz (2007); Charumathi & Ramesh (2015), though they have used single conventional attribute of CG only as its proxy measure with small number of firm–year observations
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Indonesian Journal of Sustainability Accounting and Management
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
