Voluntary disclosure and corporate governance: empirical evidence from Kuwait

Abstract

Purpose The purpose of this paper is to assess and analyse the level of voluntary disclosure practices in the annual reports of Kuwait Stock Exchange (KSE) listed firms and explore the association between corporate governance mechanisms and voluntary disclosure practices. Design/methodology/approach Panel data analysis was undertaken over a period from 2005-2008 with an aim to examine the influence of corporate governance mechanisms on voluntary disclosures made by 52 listed firms in their four years of annual reports. An unweighted voluntary disclosure index has been used for hand-collecting data from annual reports. Findings The findings show that the mean voluntary disclosure level over the four years is 23 per cent. Four out of eight corporate governance mechanisms examined found to be significantly associated with the level of voluntary disclosure, three negatively, one positively. Cross directorship, board size and role duality are negatively related to voluntary disclosure, while government ownership is positively related to voluntary disclosure. In contrast, the proportion of non-executive directors, family members on the board, the presence of an audit committee and the presence of the ruling family on the board have an insignificant influencer on voluntary disclosure practices. Practical implications The study provides an assessment of KSE-listed firm voluntary disclosure practices and its determents and highlights that that corporate governance attributes affect the voluntary disclosure practices of KSE-listed firms. Originality/value The findings of this study contribute to the arguments concerning the role of corporate governance mechanisms in improving the level of disclosure and information transparency.

Does Corporate Governance Influence Voluntary Disclosure? Evidence from India

“…However, despite of large amount of research on control mechanisms the question remains as to whether CG and VD coexist or they are used as alternate control mechanisms? Though, several studies were undertaken to address this issue, most of them have explored the same in context of developed countries and some in case of emerging countries showing both complementary and substitutive relationship between CG and VD (Adams & Hossain, 1998;Eng & Mak, 2003;Barako et al, 2006;Patelli & Prencipe, 2007;Elfeky, 2017;Alfraih & Almutawa, 2017;Maskati & Hamdan, 2017;Odoemelam & Okafor, 2018;Munther, 2019). In particular, literature lacks empirical evidence on the relationship between CG and VD in Indian context with the exception of Hossain & Reaz (2007); Charumathi & Ramesh (2015), though they have used single conventional attribute of CG only as its proxy measure with small number of firm-year observations.…”

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“…The larger companies are often becoming the focus of society and government on wealth redistribution, taxes and institutional actions (Scaltrito, 2016). In this study, firm size is measured from the total assets of the company at the end of the accounting period (Alfraih & Almutawa, 2017).…”

The Determinants of Voluntary Disclosure in Indonesia State-Owned Enterprises Annual Reports

“…Accordingly, the agent is encouraged to provide better communication with their stakeholders through disclosing more information. Further, Alfraih and Almutawa (2017) suggest that within the legitimacy theory, firms with high government ownership is predicted to disclose additional information because their activities are monitored by the public. This condition may also be applicable in Indonesia SOE because of the relatively high (at least 51%) ownership by the GOI.…”