The purpose of this paper is to explore to what extent risk disclosure is associated with banks’ governance characteristics. The research also focuses on how the business environment and culture may create a bank’s awareness of risk management and its disclosure. This study is conducted in a setting where banks are not mandated to follow international standards for their risk disclosures.
Using 300 bank-year observations comprising hand-collected private commercial bank data, the study uses regression analysis to investigate the influence of risk governance characteristics on risk disclosure.
This paper reports a positive relationship between risk disclosure and banks’ governance characteristics, such as the presence of various risk committees and a risk management unit.
Because studies are lacking on risk disclosure and risk governance conducted in developing countries, it is expected that this research will make a significant contribution to the literature and provide a foundation for further research in this field.
This study complements the corporate governance literature, more specifically the risk governance literature, by incorporating agency theory, institutional theory and proprietary cost theory to provide robust evidence of the impact of risk governance practices in the context of a developing economy.
Previous studies on risk disclosure and governance determinants primarily involve developed countries. This paper’s contribution is to examine risk disclosure and risk governance characteristics in a developing country in which reporting according to international standards is effectively voluntary.
Nahar, S., Azim, M.I. and Hossain, M.M. (2020), "Risk disclosure and risk governance characteristics: evidence from a developing economy", International Journal of Accounting & Information Management, Vol. 28 No. 4, pp. 577-605. https://doi.org/10.1108/IJAIM-07-2019-0083
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