Extent Of Risk Disclosure Research Articles

Corporate governance impact on risk disclosure in Shariah-compliant financial firms of Kuwait

Purpose This study aims to investigate the relationship between corporate governance characteristics and risk disclosure in Shariah-compliant financial firms operating in Kuwait. It aims to provide insights into the factors influencing risk disclosure practices within these institutions. Design/methodology/approach The research used manual content analysis to quantify risk disclosure levels in the annual reports of 47 Shariah-compliant financial companies listed in Kuwait in 2020. Subsequently, multiple regression analysis was conducted to assess the impact of various corporate governance factors on the extent of risk disclosure. Findings The study reveals that while Kuwaiti Shariah-compliant firms exhibit limited risk disclosure in their annual reports, larger boards and committees, along with a higher number of independent directors, positively influence the level of risk disclosure. Interestingly, the size of the Shariah supervisory boards did not show a significant impact on risk disclosure practices. Practical implications These findings hold regulatory implications for Kuwait, highlighting the need to ensure information adequacy and promote market efficiency. Additionally, they offer practical insights for managers and investors seeking to optimize fund sourcing and diversify investment portfolios within the context of Shariah-compliant financial institutions. Originality/value This study contributes to the existing literature by providing empirical evidence on the relationship between corporate governance characteristics and risk disclosure in the specific context of Shariah-compliant financial firms operating in Kuwait. Furthermore, it identifies avenues for future research to delve into the influence of additional governance factors on risk disclosure practices within this unique financial landscape.

DETERMINANTS OF RISK DISCLOSURE IN TOP-PERFORMING AUTOMOBILE COMPANIES IN INDIA

Considering the business environment, operations, and regulatory environment companies operate in, disclosure requirements per the regulatory authorities have been more stringent. This study examined the degree of disclosure of risk information disclosed by companies established in India in the automobile sector listed on the National Stock Exchange (NSE) and listed international companies with unlisted subsidiaries in India. This study also aims to identify the governance attributes that influenced the practice of risk disclosure among the selected companies in India. The main risks in top-performing automobile companies in India have disclosed are examined in this paper, along with the board characteristics associated with the disclosure of corporate risk information. The variables included in the study are board size, board independence, and ownership concentration. The content analysis approach was adopted to determine the degree of risk disclosure practices. This study has also applied the descriptive statistics method and fixed effect analysis to measure the degree of information disclosure and to elaborate on the interrelationship between disclosure practices in India and governance attributes. Assessing India's top-performing automobile companies eventually unraveled the risk disclosure practices. Agency and signalling theories were adopted in this study to elucidate the company disclosure practice. The study reveals that there is a significant positive association between board size and the extent of risk disclosure; a significant positive association between board independence and the extent of risk disclosure; and a significant negative association between ownership concentration and the extent of risk disclosure.

Consent practices in midwifery: A survey of UK midwives

ObjectiveTo explore midwives’ knowledge and understanding of the law and practice of consent in the post-Montgomery world. DesignCross-sectional online survey. Descriptive statistical analysis of midwives’ survey responses. SettingsSocial media: Instagram, Facebook and Twitter. Survey distribution was via the UCL Opinio survey platform. ParticipantsA total of 402 midwives, surveyed over a four month period between 2nd March and 2nd July 2021. MeasurementsKnowledge of legal consent, ‘sureness’ of meeting current legal requirements and competence to gain consent. Findings91% of participants acknowledged correctly that consent must be voluntary. 91% reported that women must be informed of all the risks associated with their care, although 26% reported that women should be informed of some of the risks associated with their care. Most participants were ‘sure’ that their discussions of consent meet current legal requirements (91%). 21% rated their competence to gain consent as ‘excellent’, 71% rated themselves as ‘very good’, whilst 1% rated their competence as ‘poor’. Deficiencies in fundamental knowledge of consent were noted in some participants rating themselves highest in ‘sureness’ of meeting legal requirements and competence to consent. Key conclusionsFundamental gaps in midwives’ knowledge of legal consent were identified. Participants demonstrated uncertainty regarding the extent of risk disclosure and discussion of alternative care options. Participants generally rated themselves highly in their consenting practices, despite lacking in basic knowledge of legal consent, revealing a discrepancy between midwives’ self-perceptions and their actual knowledge. Implications for practiceThe overconfidence displayed by some participants is concerning for clinical midwifery practice. Professional education and guidance for midwives on legal consent in keeping with Montgomery is urgently required to ensure that midwives are legally compliant in their consenting practices.

Corporate risk reporting about Brexit as political communication

How can we account for differences in the extent of risk disclosure among companies? The paper expands the existing explanations by claiming that corporate risk reporting is not just financial but also political communication. The presented empirical analysis of how corporations disclose Brexit-related uncertainties suggests that risk reporting is a part of a company’s holistic conversation with multiple audiences in society (e.g. politicians, regulators, journalists and customers) and might have well-targeted but also unforeseen effects on each of them. The quantity and quality of risk disclosure can be explained – among other factors – by the extent to which companies want to participate in public discourse and wish their opinions on a particular political issue, such as Brexit, to be heard. In other words, risk reporting is a part of ‘the politics of expectations’ which should be investigated in its own right.

Can Trustees Be Trusted? Relation Between Corporate Bond Trustees and Credit Spreads

ABSTRACT To protect the interest of the investors, the corporate bond market in China has implemented a trustee system. However, before the first bond default happened in 2014, implicit government guarantee for the issuers ensured a market with zero default. In recent years, the rising amount of corporate bond defaults has ignited concerns about the credit risk and brings China’s underdeveloped trustee system to authorities’ attention. Based on the textual content of the trustee reports from 2013 to 2018, this paper examines the association between the textual content of trustee reports and the credit spreads. Results show that the extent of risk disclosure in trustee reports is positively correlated with the credit spreads. Furthermore, a higher positivity of the trustee reports is associated with lower credit spreads. These results reveal the monitoring and informational role of the trustees in China. Also, incremental explanatory power of the trustees lends support for improving corporate bond risk management.

English

This paper examines the relationships between corporate governance variables and the extent of risk disclosures among listed companies in Kenya. The study aims to empirically examine the relationship between corporate governance variables and risk disclosures in 48 listed non-financial companies in Kenya. Content analysis of annual reports for the period 2010-2016 was used to measure the level of risk disclosures and compute the risk disclosure index for each company studied. The relationships between variables were analysed using panel data analysis. The findings show that the percentage of non-executive directors, ownership dispersion, percentage of foreign ownership, women in boards affected significantly the level of risk disclosures in the studied companies. Additionally, the control variables, firm’s size and firm’s profitability also significantly affected the level of risk disclosures. It can be concluded that the agency theory and the signalling theory can be used to explain the risk disclosure behaviours of listed firms in Kenya. It is recommended that companies should strengthen their corporate governance mechanisms in order to deal with risks facing them. Key words: Risk disclosures, corporate governance, agency theory, signalling theory, non-financial sectors.

Informed Consent: an Update

An indication for a medical intervention alone is not sufficient to justify its implementation. In addition, consent has to be obtained from the patient who has been given relevant information by a doctor. If, instead of the patient, other persons are entitled to decide for him (parents for children incapable of consent, authorised representatives, carers), they must be informed. If the patient, who is aware of the significance of his decision, refuses to consent to the measure as a whole or to parts of it, the physician is bound by it - even if the patient's refusal is based on religious, ideological or other reasons which are not comprehensible to the physician. In urgent cases, and in the case of a patient unable to give consent, the doctor can initiate treatment according to the principle of so-called presumed consent. The physician must inform the patient about all circumstances essential for the consent in a timely and comprehensible manner, i.e. also in the language of the patient in the case of patients who do not understand German. The patient must be informed about alternatives if there are other common treatment methods that are medically equally indicated, but which carry substantially different burdens, risks or chances of recovery. From a medical and forensic point of view, risk education is of the greatest importance, in particular information about the typical risks specific to interventions which are unknown to the patient and which, if they materialise, might have a lasting adverse effect on the patient's lifestyle. The extent of risk disclosure is influenced by the urgency of the intervention; the scope of risk disclosure is in inverse proportion to its urgency. An enlightened or otherwise adequately informed patient (e.g. in the case of a series of dressing changes under general anaesthesia) does not have to be enlightened every time, provided that the risk spectrum for the patient has not changed. Consent and clarification are also verbally effective, written form is strongly recommended for reasons of preserving evidence. However, the patient's right to self-determination also means that the patient can expressly dispense with more detailed information. Such a waiver should be carefully documented.

CHARACTERISTICS OF THE BOARD OF COMMISSIONERS, COMMITTEES AND DISCLOSURE OF COMPANY RISK

This study examines the influences of board of commissioneer and committee characteristics on the extent of enterprise risk management disclosure. The sample consists of 168 non-financial companies listed on Indonesia Stock Exchange for period of 2014-2016. A risk disclosure index is used to measure the extent of such disclosure. The results show that the presence risk management committee has a significant effect on the extent of risk disclosure. However, other board and committee characteristics doesn’t have significant influence on risk disclosure. The result of this suggests that corporate governance mechanisms, specifically board and audit committee have not fully explained their role in enhancing transparency, especially in communicating corporate risks.

Risk disclosures, international orientation, and share price informativeness: Evidence from China

This paper examines the impact of textual risk disclosure on the amount of firm-specific information incorporated into share prices, as measured by stock price synchronicity. Using a sample of Chinese listed firms, we find that synchronicity is inversely associated with the extent of risk disclosure, suggesting that risk disclosure is firm specific and useful to investors. In addition, our results show that the usefulness of risk information is statistically and economically more pronounced among internationally oriented firms than domestically oriented ones. This result is consistent with the necessity for risk disclosure being more meaningful when it relates to greater uncertainty. Finally, we find that internationally oriented firms tend to disclose more risk factors than their domestically oriented counterparts. Overall, our results shed light on the current debate over whether narrative sections of annual reports convey useful information to investors.

Ruling Family Political Connections and Risk Reporting: Evidence from the GCC

This study examines whether the presence of ruling family members on boards of directors influences the extent and the quality of risk reporting. Based on a sample of publicly listed financial firms of the Gulf Cooperation Council countries between 2007 and 2011, our regression results show that ruling family board members reduce the quality and extent of risk disclosures. Firms with ruling family board members also disclose significantly less during periods of financial distress and when they are subject to higher levels of risk. We find that risk reporting is negatively associated with the existence of a ruling family director acting as the board chairperson, negatively associated with increasing proportions of ruling family directors on the board, and negatively associated with increasing numbers of board members who are connected to ruling family directors. Our results suggest that politically connected directors seize private benefits at the expense of their firms' shareholders. Our regression results hold after a series of robustness checks that control for endogeneity and for alternative measures of ruling family membership.

Risk disclosures by South African listed companies post-King III

The introduction of principles on the governance of risk in the King Code on Corporate Governance (King III), coupled with the drive for more integrated models of reporting, has highlighted the need for effective communication of risks and risk-management strategies to stakeholders. To date, however, there has been little research on trends in risk disclosure practices by large firms listed on the Johannesburg Stock Exchange (JSE). As such, this research adds to the body of integrated reporting literature by examining changes in the extent of risk disclosures by these companies from 2010 to 2012. The research finds that, although there has been an increase in disclosure over this period, there is a possibility of reporting on the governance of risk being a compliance-based exercise rather than an example of effective stakeholder communication.

Investigating risk reporting practices in the global insurance industry

Abstract This paper investigates incentives and disincentives for risk reporting practices by global insurance companies. We examine various arguments for and against risk reporting, whether voluntary or compliance in nature. An important issue is whether reporting is dominated by shareholder, regulatory or managerial incentives. We evaluate whether current reporting practices are consistent with either political visibility, cultural effects or idiosyncratic managerial incentives. Our empirical analysis is based on (1) a content analysis of disclosures contained in annual reports of a sample of European, Asian and US global top 25 insurers between 2006 and 2012 and (2) a survey of internal business reporting practices. We re-characterise a disclosure index from prior research to examine the relation between the extent of risk disclosure and various managerial, agency and other characteristics. We predict that the extent and nature of risk disclosures depends on cultural imperatives and managerial incentives.

Investigating Risk Disclosure Practices in the European Insurance Industry

In light of the upcoming Solvency II Pillar 3 disclosure regulation for the insurance industry, this paper explores the risk disclosure practices in annual reports of European primary insurers in the Dow Jones Stoxx 600 Insurance Index between 2005 and 2009. On the basis of a self-constructed risk disclosure index, the study examines the relation between the extent of risk disclosure and insurance companies’ characteristics such as size, risk, profitability, ownership dispersion, cross-listing, home country and type of insurance sold, to draw inferences regarding motives for enhanced risk disclosure based on positive accounting theory.

Investigating Risk Disclosure Practices in the European Insurance Industry

In light of the upcoming Solvency II Pillar 3 disclosure regulation for the insurance industry, this paper explores the risk disclosure practices in annual reports of European primary insurers in the Dow Jones Stoxx 600 Insurance Index between 2005 - 2009. Based on a self-constructed risk disclosure index, the study examines the relation between the extent of risk disclosure and insurance companies' characteristics such as size, risk, profitability, ownership dispersion, cross-listing, home country, and type of insurance sold, to draw inferences regarding motives for enhanced risk disclosure based on positive accounting theory. Horing, D. and H. Grundl (2011), Investigating risk disclosure practices in the European insurance industry, The Geneva Papers advance online publication 1 June, doi:10.1057/gpp.2011.13