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The power of governance: unraveling the influence of voluntary disclosure on bank’s value in Pakistan

Fizza Irfan (Hailey College of Commerce, University of the Punjab, Lahore, Pakistan)
Muhammad Usman (Hailey College of Commerce, University of the Punjab, Lahore, Pakistan)
Zahid Bashir (Department of Commerce, University of Gujrat, Gujrat, Pakistan, and Hailey College of Commerce, University of the Punjab, Lahore, Pakistan)
Sabeeh Iqbal (Hailey College of Commerce, University of the Punjab, Lahore, Pakistan)

Corporate Governance

ISSN: 1472-0701

Article publication date: 1 July 2024

Issue publication date: 27 August 2024

69

Abstract

Purpose

This study aims to examine the influence of voluntary disclosure on bank value in Pakistan, considering the moderating effect of corporate governance characteristics: ownership control, board independence and board size.

Design/methodology/approach

The study uses data from 20 listed Pakistani banks for the period 2011–2021. The estimation contains robust fixed effect and its assumptions, and a model of standard error with panel corrections.

Findings

The findings revealed a weak positive impact of voluntary disclosure on bank value. However, the increase in the number of independent directors strengthens the positive impact of voluntary disclosure on a bank’s value. Conversely, increasing the ownership concentration, and board size (other than independent directors) may strongly decrease the impact of voluntary disclosure on a bank’s value in Pakistan.

Research limitations/implications

The study’s limitations include its exclusive focus on the Pakistani banking industry. Future research should take into account newer contexts and data. The findings suggest that future research should investigate the topic in various contexts, including a comparison of Islamic and conventional banks.

Practical implications

The practical implications for Pakistani banks emphasize transparency, board composition and ownership structure. In terms of managerial implications, using independent directors, aligning ownership interests and addressing disclosure challenges are highlighted.

Originality/value

Focusing on independent directors, ownership concentration and board size, this study enhances knowledge of the impact of voluntary disclosure on bank value in Pakistan. It contributes to agency theory and the literature in this domain.

Keywords

Citation

Irfan, F., Usman, M., Bashir, Z. and Iqbal, S. (2024), "The power of governance: unraveling the influence of voluntary disclosure on bank’s value in Pakistan", Corporate Governance, Vol. 24 No. 6, pp. 1497-1523. https://doi.org/10.1108/CG-07-2023-0294

Publisher

:

Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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