Firm's Attributes and Corporate Governance Disclosure Practices: An Empirical Investigation

Abstract

The foundation of any structure of corporate governance is disclosure. Various committees constituted in different countries, in the wake of major corporate failures, scandals and financial irregularities in different parts of world have resulted in codes of best practices and corporate governance guidelines. The present paper studies relationship between company attributes and extent of corporate governance disclosures. The study is based on secondary data from 100 selected BSE listed companies. An ‘Index of corporate governance disclosure’ consisting of 85 items was constructed. Linear Regression Equation has been used for each independent Variable separately and Multiple Regression Analysis for all variables done. Findings exhibit a positive relationship between selected company attributes and extent of corporate governance disclosure. The companies which disclose greater items of corporate governance nature are likely to be(a) Large in size as measured by Share-Holders Funds (b) More profitable as measured by PAT as % of Sales (c) Liberal in distributing profits by issue of bonus shares. (d) Their shares being included in active stocks (A type) listing on Bombay Stock Exchange. The proportion of independent directors in board does not have clear relationship with disclosure practices.