Determinants of corporate risk disclosure in large Spanish companies: a snapshot

Abstract

Improvements in risk disclosure have been an important part of the corporate governance reforms. This paper is intended to identify the factors that explain the extent to which a sample of 35 listed Spanish firms disclose risk-related information. This study focuses on the risk disclosures made in the corporate governance reports during the year 2009. Using the content analysis technique an index was developed in order to assess the amount and quality of the risk information disclosed by Spanish companies. Several characteristics were selected and their influence on the level of risk disclosure was tested empirically. Results indicate that sector and risk level are positively related to the extent of corporate risk disclosures. This study adds to the international research on risk disclosure by extending the scope of the current understanding of risk reporting practices and their determinants. The findings could be especially useful for regulators and policy-makers in order to enhance risk disclosure and to improve transparency.

Corporate risk reporting: Analysis of risk disclosures in the interim reports of public Portuguese non-financial companies

“…Given the scarce research in interim reports, it must be taken into account that the data obtained are mostly compared to that obtained in the research in annual reports. TRD is positively related to size (p<0.01) confirming the existing literature findings (Elshandidy & Neri, 2014;Hassan, 2014;Madrigal et al, 2015;Linsley & Shrives, 2006;Mohobbot, 2005;Ntim et al, 2013;Oliveira et al, 2011;Semper & Beltrán, 2009). Profitability (ROE) did not show association with risk disclosure indexes in line with Al-Shammari (2014), Elshandidy, Fraser, and Hussainey (2013) and Elzahar and Hussainey (2012).…”

“…In the last decades there was an increase of research about corporate risk disclosure (Abraham & Cox, 2007;Allini, Manes, Francesca, & Hussainey, 2016;Madrigal, Guzmán, & Guzmán, 2015;Linsley & Shrives, 2006;Oliveira, Rodrigues, & Craig, 2011); most of them conclude that risk information is not enough (Kravet & Muslu, 2013), triggering doubts about the quality and utility of disclosed risk information (Abraham & Shrives, 2014).…”

“…Studies in this field registered different research objectives and methods varying from the identification, by means of manual content analysis, of the nature of risk information included in the narrative sections of firms reports (Abraham, Solomon, & Stevenson, 2007;Abraham & Cox, 2007;Amran, Bin, & Hassan, 2009;Atan, Marahun, Kadir, & Jusoff, 2010;Beretta & Bozzolan, 2004;Berger & Gleißner, 2006;Combes-Thuélin, Henneron, & Touron, 2006;Dobler, Lajili, & Zéghal, 2011;Lajili & Zéghal, 2005;Linsley & Shrives, 2006;Mohobbot, 2005;Oliveira et al, 2011;Rajab & Schachler, 2009;Semper & Beltrán, 2009) to OLS looking to find firm related variables that may explain the level of risk disclosures Abraham & Cox, 2007;Amran et al, 2009;Atan et al, 2010;Beretta & Bozzolan, 2004;Dobler et al, 2011;Madrigal et al, 2015;Linsley & Shrives, 2006;Mohobbot, 2005;Neri, 2010;Oliveira et al, 2011;Semper & Beltrán, 2009;Vandemaele, Vergauwen, & Michiels, 2009) or assess the utility of disclosed risk information (Campbell, Chen, Dhaliwal, Lu, & Steele, 2014;Kravet & Muslu, 2013). As in other broad corporate disclosures studies, research in risk disclosure investigated firm specific features, as size, risk, profitability, industry or cross listing.…”

Estrategia de gestión y divulgación del capital intelectual: influencia del gobierno corporativo

“…Las empresas cotizadas en el mercado continuo español que estuviesen incluidas en el índice bursátil del IBEX 35 durante el período 2004-2008 constituyen la población de partida, al ser éstas más susceptibles de una mayor transparencia informativa (Hernández, Aibar, & Aibar, 2015). El IBEX 35 es el principal índice bursátil de referencia de la bolsa española.…”

Corporate Risk Disclosure: A Review

“…In weakly governed Italian firms, mandatory disclosure levels were observed to have significant positive association with firm size. Madrigal et al 85 , observed significant positive association of level of risk disclosure in Spanish companies with firm size, firm risk level and nature of industry. AlHadi et al 86 , observed significant and positive association of level of market risk disclosures with existence of dedicated risk committees in companies listed in the GCC (Gulf co-operation council) countries and the presence of directors representing the government on the board.…”