The relationship between corporate governance and voluntary disclosure on key financial performance indicators: An empirical analysis on Italian listed companies

Alfredo Celentano,Federico Alvino,Franco Leporé ,Sabrina Pisano,Catello Staiano

doi:10.22495/ncpr_32

Abstract

The aim of the paper is to empirically analyse how different corporate governance mechanisms impact on the level of voluntary disclosure on key financial performance indicators (KFPIs) released by firms. We investigate ownership concentration, board independence, role duality, board meetings and board size, and we hypothesize a relation with voluntary disclosure on KFPIs for each variable analysed. Using an OLS regression model, our results show that there is both a negative relationship between ownership concentration and KFPIs disclosure, and a positive association between board independence and role duality and the level of voluntary financial disclosure

Highlights

Firms use voluntary disclosure in order to increase their responsiveness towards stakeholders, communicating their activities and the “NEW CHALLENGES IN CORPORATE GOVERNANCE: THEORY AND PRACTICE” Naples, October 3-4, 2019 performance achieved
Board independence, role duality, board meetings and board size, and we hypothesize a relation with voluntary disclosure on key financial performance indicators (KFPIs) for each variable analysed
Using an OLS regression model, our results show that there is both a negative relationship between ownership concentration and KFPIs disclosure, and a positive association between board independence and role duality and the level of voluntary financial disclosure

Summary

Introduction

Firms use voluntary disclosure in order to increase their responsiveness towards stakeholders, communicating their activities and the “NEW CHALLENGES IN CORPORATE GOVERNANCE: THEORY AND PRACTICE” Naples, October 3-4, 2019 performance achieved. With specific regard to corporate governance variables, scholars investigated, among others, the potential impact of ownership concentration (Firer & Williams, 2005; Chau & Gray, 2002; Pisano et al, 2017), board independence (Fama & Jensen, 1983; Armstrong et al, 2010; Ho & Wong, 2001), role duality (Carver, 1990; Forker, 1992), board activity (Vafeas, 1999; Frias-Aceituno et al, 2013) and board size (John & Senbet, 1998; Cheng & Courtenay, 2006) on voluntary disclosure. We focused on the analysis of voluntarily disclosure on key financial performance indicators (KFPIs)

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