Level Of Corporate Governance Disclosure Research Articles

Corporate Governance and Financial Performance of Listed Firms in Nigeria

The objective of this study was to investigate the impact of corporate governance practices on the financial performance of listed companies in Nigeria. The study encompassed three industries: manufacturing, finance, and oil and gas, spanning the years 2010 to 2020. Employing a content analysis approach, data were collected from corporate websites and the Securities and Exchange Commission website. A total of 33 businesses were selected for the study. The study's analysis revealed that a majority of the corporations disclosed the majority of their corporate governance policies. Notably, the banking industry exhibited the highest level of corporate governance disclosure compared to other sectors. This implies that a company's decision to publish its corporate governance information online in Nigeria might be influenced by the regulatory environment of the sector. However, intriguingly, the research did not establish a correlation between a company's corporate governance score and its financial performance. Nevertheless, there was notable variation in the extent of corporate governance reporting across different sectors. In light of these findings, the report recommends that the Securities and Exchange Commission's code of best practices should be made obligatory for all industries in Nigeria. Furthermore, the establishment of a compliance team is advised to ensure that businesses across all sectors in Nigeria adhere to the regulatory mandates outlined in the code of corporate governance.

Corporate governance disclosure and annual reports quality: An investigation in Vietnam context

Corporate governance reports (CGR) and annual reports are two fundamental corporate documents disseminated to shareholders about the companies’ financial condition and operation. While the annual reports could be seen as outside appearance, the CGR reflects internal processes that an entity monitors the actions, policies, practices and decisions (Muttanachai and Thanyaorn, 2022; Ho and Taylor, 2014). Vietnam’s publicly traded companies are compulsory required to provide annual reports and CGR to shareholders. The purpose of this research is to investigate the link between the level of corporate governance disclosure (CGD) and the quality of annual reports in the context of Vietnam—an emerging and dynamic country in South East Asia. The existing literature review is developed by using a bibliometric analysis (via VOSviewer software) with Scopus database from 2002 to 2022 provides comprehensive evidence for mixed effects of the level of CGD on quality of annual reports, therefore, the paper attempts to contribute to the ongoing debate by examining whether the association between CGD and the quality of annual reports is nonlinear. Furthermore, the quality of annual reports and level of CGD are measured basing on scorecard of Vietnam Listed Company Awards (VLCA) reflect the typical research issues in the context of Vietnam. A panel smooth transition regression (PSTR) model is applied in order to test the relationship and calculate the value transition threshold of 356 Vietnamese listed companies from 2017 to 2022. Empirical findings indicate that there has been a nonlinear relationship between two tested variables. In addition, the quality of annual reports positively increases when the level of CGD exceeds the value transition threshold. Hence, the listed companies with high level of CGD (exceeds threshold value) have an incentive of preparing high quality annual reports.

Advancing SDG No 16 via Corporate Governance Disclosure: Evidence from Indonesian and Malaysian Fintech Companies’ Websites

The aims of this paper are: (1) to examine the extent of corporate governance disclosure on the websites of Indonesian and Malaysian FinTech companies using the coercive isomorphism tenet, and (2) to determine whether variation in the extent of corporate governance disclosure is influenced by the country and type of FinTech services. The websites of 148 Indonesian and 159 Malaysian corporations were subjected to content analysis using a Modified Corporate Governance Disclosure Index (MoCGOvDi). The MoCGovDi was constructed using the ASEAN Corporate Governance Scorecard and previous research. The level of corporate governance disclosure is higher among Malaysian FinTech companies, possibly due to stronger coercive pressure by government regulation in Malaysia. Overall, the level of corporate governance disclosure is low in both countries (7 and 9 items out of 50 total items for Indonesia and Malaysia, respectively), which may delay the achievement of SDG No 16. Several implications are provided in this paper to advocate the corporate governance disclosure of FinTech companies in Indonesia and Malaysia to achieve SDG No 16.

Board of commissioners and corporate governance disclosure in Sharia-compliant companies in Indonesia

Corporate governance (CG) aims to protect the interests of stakeholders by ensuring that the company is managed properly. This study aims to examine the relationship between board of commissioners (BOC) characteristics and CG disclosure. BOC characteristics consist of board size, board independence, board meeting, educational background, and cross membership. The sample of this study was sharia compliant companies listed in Indonesia’s sharia securities list registered in the year of 2017-2020. The data were analyzed using panel data regression. This study analysis 160 data from 40 companies. The results show that the level of CG disclosure is high reaching 88.89%. It may give a positive value that the companies may already have the awareness to provide adequate disclosure regarding the implementation of CG principles. The results also show that the board independence has positive effect on the CG disclosure. The finding may have impact on the regulator and users to encourage more roles of BOC in CG disclosure.

The Effect of Corporate Governance Disclosure on Banking Performance: Empirical Evidence from Iran, Saudi Arabia and Malaysia

A series of corporate failures and financial crises have raised attention to organizational governance issues, especially for financial institutions. In the banking system, corporate governance further plays a unique role because of the uniqueness of the banking organizations. Therefore, this study aims to examine the effect of corporate governance disclosure on bank performance by building a corporate governance disclosure index (CGDI) for 10 Islamic banks operating in Iran, Saudi Arabia and Malaysia. The data used in this study are secondary data taken from annual reports and sourced from the official websites of each banks include Iran Exchange, Stock Market Quotes and Financial News, and Bursa Malaysia. This study uses content analysis of the annual bank report within five years (2014-2018). The results show that Islamic banks comply with 72.4% of the attributes discussed in the CGDI. The most frequently reported and disclosed elements are board structure and audit committee. The regression results provide evidence that Islamic banks with a higher level of corporate governance disclosure reported high operating performance measured by ROA. In contrast to the expectation, the financial performance of ROE and Tobins'q are not significantly related to the disclosure of sharia bank governance.

Deposits structure, ownership concentration and corporate governance disclosure in GCC Islamic banks

PurposeThis paper aims to assess the effects of deposits structure and ownership structure on the GCC Islamic banks’ corporate governance disclosure (CGD) practices.Design/methodology/approachThe study is based on a sample of 38 Islamic banks operating in five Gulf Cooperation Council (GCC) countries, and the authors observed them over the period from 2006 to 2011. The authors used the transparency and disclosure score, developed by Standard & Poor’s (S&P), to identify the sample’s CGD scores.FindingsThis paper’s findings suggest that the level of CGD is lower for Islamic banks with higher ownership concentration, for levered Islamic banks and for Islamic banks with greater concentration of nonprofit-sharing investment accounts (PSIA) and is higher for Islamic banks with greater concentrations of PSIA; the Islamic bank size; the bank age; listed bank and the country transparency index. By disaggregating the total CGD into the three sub-categories, the authors are able to specify, also, the components of corporate governance (CG) impacted by various determinants.Research limitations/implicationsThis paper is subject to a number of limitations. First, there is manual scoring of annual reports (subjectivity). Second, the research focuses exclusively on the GCC context and excludes the other Middle East, Southeast Asia and Far East countries, where ownership structure and deposits structure might affect CGD differently. Third, the governance score, which is used in this research, is developed by S&P and does not take into account the characteristics of Islamic banks.Practical implicationsThe findings of this paper suggest many policy implications. First, through the optimization of ownership structure, GCC countries’ regulators have to improve the Islamic banking system’s CG mechanisms through the optimization of ownership structure (dispersed ownership) to promote transparency and disclosure. Second, regulators and policymakers should revise guidelines with the main purpose of protecting PSIA’ holders (considered to be minor shareholders without voting power) through promoting disclosure and transparency. Third, the findings can be useful for many international supervisory bodies, like the Islamic Financial Services Board (IFSB) and Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), in evaluating transparency and disclosure standards.Originality/valueThis study is expected to be useful for all market participants, namely, investors, financial analysts, managers, marker regulators and many international Islamic supervisory bodies, such as the IFSB and AAOIFI, by providing new requirements on CGD in the GCC region and in better understanding its determinants for Islamic banks in this region.

Determinants of Structure of Corporate Governance Disclosure in Portugal

Resumo Objetivo: Este estudo analisa os determinantes da divulgacao de informacao sobre a estrutura de governanca (DIEG) de uma amostra de empresas portuguesas listadas na Euronext Lisbon, entre 2005 e 2011. Metodologia: Utilizando a tecnica de analise de conteudo, construiu-se um indice de divulgacao para cada empresa e aplicou-se um modelo de regressao ordinal logistica para aferir as hipoteses. Resultados: Os resultados sugerem que a participacao de investidores estrangeiros no capital, o tamanho e a independencia do conselho de administracao, a qualidade da auditoria externa e o grau de internacionalizacao das empresas melhoram o nivel de DIEG. Por sua vez, a concentracao da propriedade, a existencia de estruturas de lideranca unitarias e o endividamento exercem uma influencia negativa no nivel de divulgacao. Nao foi possivel constatar resultados estatisticamente significativos para as variaveis participacao da gestao no capital e remuneracao dos gestores com base em stock options em Portugal. Contribuicoes: Este estudo contribui para a literatura relativa a divulgacao de informacao, tendo como foco a informacao sobre a estrutura de governanca das empresas. Alem disso, acrescenta a literatura as dimensoes: investidores qualificados estrangeiros, atribuicao de planos de acoes aos membros do conselho de administracao e grau de internacionalizacao, ate agora pouco exploradas. Por fim, e realizada uma analise longitudinal e transversal ao longo de sete anos, pouco utilizada em estudos previos.

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

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.

An Evaluation of Corporate Governance Disclosure in Ghanaian and Nigerian Banks

Corporate governance disclosure has become the buzz word for countries in developing economies, with the spate of corporate governance failures and the need to prevent a continuation of this trend. There has been the call for developing countries to enhance and improve on corporate governance disclosure practices. This study examines corporate governance disclosure in Ghanaian and Nigerian Banks using the un-weighted disclosure index technique. This research analyses corporate governance disclosure practices in the annual reports of 10 listed banks in Ghanaian and Nigerian banks in the year 2014. The findings of the research reveal that Ghanaian and Nigerian banks comply with several codes and principles of corporate governance disclosure: with Ghanaian banks having a lower level of disclosure than their Nigerian counterparts. On closer inspection, both Ghanaian and Nigerian banks have poor scores in voluntary corporate governance disclosure. Ghanaian banks tend to be worse off, as the level of variation in levels of corporate governance disclosure is higher than Nigerian banks. In comparison, Nigerian banks on the average tend to have better voluntary disclosure practices than Ghanaian banks. Also, Ghanaian and Nigerian banks include some elements of corporate social responsibility reporting in their annual reports. The research recommends that policymakers and regulators should devise policies targeted at enhancing voluntary corporate governance disclosure and increasing board diversity in the boardrooms.

The status and determinants of corporate governance disclosure: The case of the Gulf countries

Corporate Governance Disclosure (CGD) is important for countries aiming to attract international investors and increase foreign investment. CGD helps mitigate the agency problem, improve firm value and enhance capital market efficiency. This research aims to assess the level of CGD in the Gulf countries. The Gulf countries have been selected due to their unique institutional and corporate characteristics. After assessing the CGD level in the Gulf, the association between diversity, board characteristics and CGD is identified while controlling for firm characteristics. Four board characteristics are used: the proportion of independent nonexecutive directors on board, the proportion of family members on board, role duality and board size; whereas diversity variables included proportion of foreign board members, proportion of foreign members in the senior management team, proportion of female board members and proportion of female members in the senior management team. A self-constructed disclosure index is developed to measure CGD. The index includes six sections: ownership structure and investor rights, financial transparency and information disclosure, information on auditors, board and senior management structure and process, information on board committees, and finally, corporate behavior and responsibility. This classification follows most of the international disclosure indices. The sample size includes 270 publicly listed non-financial companies listed on all Gulf stock exchanges, with data taken from 2009 annual reports. The average CGD is 32 percent, the maximum is 63 percent whereas the minimum is 5 percent. Proportion of independent non-executive directors on board, proportion of foreign board members and proportion of foreign members in the senior management team had a significant positive relationship with CGD. This research is considered the first to assess CGD across the six Gulf countries. This study has important regulatory and managerial implications.

Financial Determinants of Corporate Governance Disclosure: Portuguese Evidence

The present study analyses the financial determinants of the level of corporate governance disclosure (CGD) across a large sample of Portuguese firms, listed in the Euronext Lisbon index, in the period between 2005 and 2011. An index, using data drawn from firms’ annual reports regarding corporate governance, was constructed based on content analysis to measure CGD levels. An ordinal logistic model was formulated to explore the financial determinants of information disclosure. The present study’s main findings suggest that firm size and growth opportunities had a significant and positive influence on CGD while financial leverage negatively affected the latter. Finally, no relationship was observed between CGD and financial performance.

Ownership structure, board's characteristics and corporate governance disclosure in GCC banks: what about Islamic banks?

This paper assesses the effects of ownership structure and board's characteristics on the corporate governance (CG) disclosure for GCC banks. We based our study on a sample of 72 banks operating in five GCC countries and observed them over the period from 2006 to 2011. Our paper's findings suggest that the level of CG disclosure is relatively low in GCC banks. However, there has been a gradual improvement of CG disclosure over time and, nowadays, there is little difference between Islamic and non-Islamic banks. Our study's results show that higher presence of block holder ownership is associated with a reduced level of overall CG disclosure and, moreover, CEO duality, board size and board independence are associated with high CG disclosure. We find, also, that bank size, country transparency index and to be located in Bahrain have a positive effect on the overall level of CG disclosure. In addition, it appears that higher leverage and the Islamic nature of the bank tend to reduce banks' overall levels of CG disclosure. Furthermore, we observed mixed results for the effects of variables: foreign ownership; institutional ownership; profitability; bank age and listing status on CG disclosure. Our results shed light on how agency conflicts, faced by GCC banks, affected their level of CG disclosure. This paper encourages regulators in GCC countries to improve corporate governance mechanisms in their banking systems through the optimisation of ownership structure (dispersed ownership) and the board's characteristics (CEO duality, board size and board independence), in order to promote transparency and disclosure.

Ownership structure, board's characteristics and corporate governance disclosure in GCC banks: what about Islamic banks?

This paper assesses the effects of ownership structure and board's characteristics on the corporate governance (CG) disclosure for GCC banks. We based our study on a sample of 72 banks operating in five GCC countries and observed them over the period from 2006 to 2011. Our paper's findings suggest that the level of CG disclosure is relatively low in GCC banks. However, there has been a gradual improvement of CG disclosure over time and, nowadays, there is little difference between Islamic and non-Islamic banks. Our study's results show that higher presence of block holder ownership is associated with a reduced level of overall CG disclosure and, moreover, CEO duality, board size and board independence are associated with high CG disclosure. We find, also, that bank size, country transparency index and to be located in Bahrain have a positive effect on the overall level of CG disclosure. In addition, it appears that higher leverage and the Islamic nature of the bank tend to reduce banks' overall levels of CG disclosure. Furthermore, we observed mixed results for the effects of variables: foreign ownership; institutional ownership; profitability; bank age and listing status on CG disclosure. Our results shed light on how agency conflicts, faced by GCC banks, affected their level of CG disclosure. This paper encourages regulators in GCC countries to improve corporate governance mechanisms in their banking systems through the optimisation of ownership structure (dispersed ownership) and the board's characteristics (CEO duality, board size and board independence), in order to promote transparency and disclosure.

Corporate Governance Disclosure Practices and Performance of Islamic Banks in GCC Countries

This paper investigates the impact of the level of corporate governance disclosure on bank performance by constructing a corporate governance disclosure index (CGDI) for 27 Islamic banks operating in five Arab Gulf countries. Using content analysis on the banks’ annual reports for 3 years (2011-2013), the composite index construction uses information on six important corporate governance mechanisms, namely board structure, risk management, transparency and disclosure, audit committee, Sharia supervisory board and investment account holders. The results demonstrate that Islamic banks adhere to 54% of the attributes addressed in the CGDI. The most frequently reported and disclosed elements are Sharia supervisory board followed by board structure and risk management. The findings related to countries revealed that only two countries, the United Arab Emirates and Bahrain, possess a higher level of CGDI. Our regression results provide evidence that Islamic banks with higher levels of corporate governance disclosure report high operating performance measured by return on assets and return on equity. Finally, as of the effect of internal and external factors, we identified four variables that were associated with bank performance, namely size, equity, risk and concentration.

Progressing corporate governance disclosure in Egypt: Current status and action plan

This study examines the level of corporate governance disclosure in Egypt and explores the attitudes of Egyptian regulators, auditors, accountants, academics and company directors about the strategies needed to enhance CG disclosure. The measurement of disclosure is based on a checklist developed by the United Nations, which was gathered using a content analysis of financial statements and websites of a sample of Egyptian companies listed on Egyptian Stock Exchange (EGX). Levels of CG disclosure are found to be very low, however, disclosure is high for items that are mandatory under the Egyptian Accounting Standards (EASs) that are based on International Financial Reporting Standards (IFRS). The failure of companies to disclose such information clearly shows some ineffectiveness and inadequacy in the regulatory framework in Egypt. Moreover, the phenomenon of non-compliance may also be attributed to the socio-economic factors in Egypt. Therefore, it is expected that Egyptian firms will take a long time to appraise the benefits of increased CG disclosure. Therefore, awareness building, education and training, incentives or disincentives to disclose including the nature of enforcement regimes are among possible policy recommendations based on interviews with Egyptian experts, but all carry costs as well as benefits. The findings provide a benchmark of performance against which future research can measure longitudinal changes after a further learning period.

"Corporate Governance And The Financial Reporting Process "

Our study approaches corporate governance in the context of the financial reportingprocess. From a theoretical point of view we draw on literature arguing that informationaltransparency connects corporate governance mechanisms and the financial reporting process withbenefits for stakeholders. The empirical analysis being developed focuses on developing acorporate governance disclosure index for companies listed on the Bucharest Stock Exchange.Looking at similar studies in literature we further consider potential determinants of the disclosureindex being computed. The employed research methodology relies on regression analysis. Theobtained results document a low level of corporate governance disclosure and the external auditorbelonging to the Big4 as a determinant of sample companies‘ corporate governance disclosurepractices.

Board Competency Explanations for Differentiation in a Harmonisation Environment

Some companies decide to differentiate from others even though the regulatory establishments such as the European Union and IASB constantly strive to encourage comparability and the need for harmonisation of reporting behaviour and governance structures. Under the harmonization regime, decisions to differentiate become strategic in nature and are placed in the hands of the (supervisory) board. We examine the influence of the competency and background of supervisory board members on decisions to differentiate in reporting and governance structure. We use data from 100 listed Danish companies. We find that early IFRS implementation is related to board competency in the form of international experience, while corporate governance disclosure level is related to internationalisation, professional background in accounting/finance and gender diversity. We also find that differentiation through voluntary implementation of audit committees is related to international experience, while board decisions to abandon the Danish joint audit regime are unrelated to competency measures.

The extent of corporate governance disclosure and its determinants in a developing market: The case of Egypt

This paper assesses the extent of corporate governance voluntary disclosure and the impact of a comprehensive set of corporate governance (CG) attributes (board composition, board size, CEO duality, director ownership, blockholder ownership and the existence of audit committee) on the extent of corporate governance voluntary disclosure in Egypt. The measurement of disclosure is based on published data created from a checklist developed by the United Nations, which was gathered from a manual review of financial statements and websites of a sample of Egyptian companies listed on Egyptian Stock Exchange (EGX). Although the levels of CG disclosure are found to be minimal, disclosure is high for items that are mandatory under the Egyptian Accounting Standards (EASs). The failure of companies to disclose such information clearly shows some ineffectiveness and inadequacy in the regulatory framework in Egypt. Moreover, the phenomenon of non-compliance may also be attributed to socio-economic factors in Egypt. Therefore, it is expected that Egyptian firms will take a long time to appraise the payback of increased CG disclosure. The findings indicate that that—ceteris paribus—the extent of CG disclosure is (1) lower for companies with duality in position and higher ownership concentration as measured by blockholder ownership; and (2) increases with the proportion of independent directors on the board and firm size. The results of the study support theoretical arguments that companies disclose corporate governance information in order to reduce information asymmetry and agency costs and to improve investor confidence in the reported accounting information. The empirical evidence from this study enhances the understanding of the corporate governance disclosure environment in Egypt as one of the emerging markets in the Middle East.

Corporate governance mechanisms and extent of disclosure: Evidence from listed companies in Malaysia

The purpose of this study is to examine the relationship between corporate governance mechanisms and extent of disclosure for listed companies in Malaysia. The study attempts to address two research issues: (1) level of corporate governance disclosure by listed companies in Malaysia; and (2) to what extent corporate governance mechanisms affect company disclosure. Regression analysis is conducted to determine the association between corporate governance mechanisms and the extent of disclosure level in Malaysian corporate sector practices. The evidence supports the conjecture that companies with higher percentage of family members sit on the board are significantly have lower level of disclosure in their annual reports.

The extent of compliance of corporate governance disclosure: evidence from Indian banking companies

The study examines the compliance of mandatory corporate governance disclosure of the Indian banking companies. The Securities and Exchange Board of India (SEBI) made it mandatory for all listed firms to provide a Corporate Governance Report in a separate section in the Annual Report. The paper has empirically identified the level of compliance of the mandatory disclosure in the corporate governance reporting under the suggested list provided by SEBI and also assessed whether the corporate attributes affect the levels of corporate governance disclosure. The study covered all the 38 banks in India that are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange(NSE). We have identified 46 items of information as mandatory and for inclusion in the disclosure index, and run a linear regression model to examine the relationship between disclosure index and various corporate attributes. The findings revealed that a high level of compliance existed in the Indian banks and that the variables of size, ownership, board composition, and profitability, have significant impact in the corporate governance disclosure