The drivers of corporate governance disclosure: the case of Nifty 500 Index

Abstract

PurposeBased on agency theory, the purpose of this paper is to investigate the determinants on the dissemination level of corporate governance disclosure (CGD).Design/methodology/approachThe sample of the study incorporates listed companies in Nifty 500 Index for the period 2009-2014. The Governance Disclosure Score calculated by Bloomberg is used as a proxy for the dissemination level of corporate governance information. In total, eight explanatory variables are uses, namely, board’s size, number of board meetings, CEO duality, presence of women on the board, company’s size, financial performance, Tobin’s Q ratio and financial leverage.FindingsThe results of study suggest a need for improvement in CGDs by Indian companies, as they fail to comply the majority of the proposed disclosure items. Furthermore, it is revealed that the number of board director, the value of company, the financial leverage and the presence of women affect negatively the dissemination level of corporate governance information. While, the size of company is the only determinant that positively affects the extent of CGD.Practical implicationsThe results are valuable because they reveal the attributes that determines which companies needs less or extra monitoring by shareholders and investors regarding the applied corporate governance practices. In addition, the study can be valuable to policy makers responsible for the regulation of company’s accountability in relation to corporate governance practices.Originality/valueThe study extents previous studies by incorporating for the first time Bloomberg’s rating approach regarding the dissemination level of CGD in Indian context.