The Board of Directors and the Audit Committee as Internal Governance Mechanisms and their Impact on Corporate Risk Disclosure in Light of COVID-19 Pandemic

Abstract

The COVID-19 pandemic worsened during 2019, and it came to confirm the importance of implementing governance mechanisms in light of what the pandemic revealed that the weakness of governance mechanisms was one of the factors that contributed to the decline in performance of many companies during the pandemic, which prompted companies to rely on the best effective governance mechanisms; to deal with the risks resulting from the pandemic, and to disclose them transparently, to ensure the survival of companies in light of the challenges posed by the COVID-19 pandemic. Therefore, this study came to investigate the impact of the internal governance mechanisms (the board of directors and the audit committee) on the corporate risk disclosure of industrial companies listed on the Amman Stock Exchange in light of the COVID-19 pandemic. The descriptive statistical approach was used, and the study population consisted of workers in the board of directors and the audit committee in industrial companies, (80) questionnaires were distributed, the number of questionnaires retrieved and valid for analysis was (70) questionnaires. The study showed the existence of a statistically significant impact of the internal governance mechanisms (the board of directors and the audit committee) on corporate risk disclosure in industrial companies. The study recommended that industrial companies, in light of emergencies and uncertainties, constantly review their strategies and policies for dealing and disclose any risks that may result from those emergencies or uncertainties.