Voluntary disclosure and corporate governance: empirical evidence from Kuwait

Mishari M. Alfraih (Department of Accounting, The Public Authority for Applied Education and Training, Kuwait City, Kuwait)
Abdullah M. Almutawa (Department of Accounting, The Public Authority for Applied Education and Training, Kuwait City, Kuwait)

International Journal of Law and Management

ISSN: 1754-243X

Publication date: 13 March 2017

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.

Keywords

Citation

Alfraih, M. and Almutawa, A. (2017), "Voluntary disclosure and corporate governance: empirical evidence from Kuwait", International Journal of Law and Management, Vol. 59 No. 2, pp. 217-236. https://doi.org/10.1108/IJLMA-10-2015-0052

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Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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