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Companies face a wide number of risks and need to have in place appropriate measures and techniques to be able to identify, manage, and monitor risks. Risk management is a fundamental responsibility of the corporate governance structure of an organization; it means managing all risks on a holistic basis, all together rather than just one, through an appropriate and systematic process. This chapter provides an overview of enterprise risk management in the United Kingdom. It presents key information on the economic system of the United Kingdom, emphasizing the role of small and medium enterprises, and presents country macroeconomic highlights. It provides a summary of regulation, practices, and authorities; it presents the key milestones of the regulation on corporate governance and reporting in the United Kingdom, and stresses the importance of corporate governance mechanism in companies' enterprise risk management practices. Further, it discusses the importance of transparency and disclosure in the context of enterprise risk management, specifically the relevance of risk management and internal control related disclosure in the annual reports and accounts. Finally, it reviews the growing academic research on enterprise risk management and previous studies on risk disclosure practices in companies' reports.

This chapter examines corporate governance–related financial reporting issues in the context of globalization. Over the past few decades, the process of globalization has substantially altered the fields of corporate governance and accounting. More specifically, Anglo-American models of corporate governance and financial reporting have received increasing momentum in emerging economies, including China. However, a review of relevant studies suggests that there is limited research examining the implementation of Anglo-American concepts in various countries regardless of their growing acceptance. This monograph extends the existing literature by comprehensively investigating the adoption of internationally acceptable principles and standards in China, the largest transitional economy that has different institutional context from Anglo-American countries. In addition, the review has a number of implications for developing the theoretical framework, and determining the research methodology for the monograph.

Purpose – This paper examines the extent to which Saudi listed companies report online information about their corporate governance practice in light of the guidance issued by the Saudi Arabian Capital Market Authority (SACMA), thereafter.

Methodology – We adopted a content analysis approach, accordingly a corporate governance disclosure index is developed to analyse the content of every company's website.

Findings – We found that the majority of Saudi listed companies utilise the Internet to communicate some information about corporate governance to their stakeholders. We also found that the level of online reporting of corporate governance varies between sectors. In particular, the paper revealed that the banking sector has the highest level of corporate governance disclosure compared with other sectors. On the other side, companies in the industry and service sectors provide very little information about corporate governance on their websites. The results suggest that the nature of control over the sector, the involvement of government in the ownership and management of businesses and some social assumptions could have an impact on companies’ decision to disclose online information about their corporate governance in developing countries.

Practical implications – The importance of investigating online reporting of corporate governance in Saudi Arabia emerges from the fact that SACMA published a guidance in 2006 that recommends the disclosure of corporate governance information by Saudi listed companies. Therefore, it would be worthwhile informing SACMA about the extent of compliance with the guidance of corporate governance. This is essential taking into consideration two facts: first, the recent remarkable growth of the Saudi stock market which was accompanied by significant increase in the demand for additional information by stakeholders; second, the recent increase of the utilisation of the Internet by companies for disclosure purposes worldwide. Further, the results of this research study could add to our limited knowledge about the practice of corporate governance in developing countries.

Originality/value – This paper contributes to the limited literature on disclosure practices in developing countries in general and in Saudi Arabia in particular. Our review of the literature revealed that there is no study to date on online disclosure of corporate governance in Saudi Arabia and very limited research has been carried out in developing countries in general. This is important taking into consideration environmental factors of developing countries, which could bring different sight in the issue of the disclosure of corporate governance.

Directors help determine the strategic direction of a corporation and are responsible for ensuring the institution has a good system of internal control. Banking institutions without a strategic direction emphasizing sound lending practices that promote the long-run financial health and viability of the institution will be sued more frequently than peer institutions. Institutions that do not have a good system of internal control will also be sued more frequently. Hence, legal expense is a bank corporate governance measure. We compare the performance of bank legal expense and a widely cited corporate governance index in a regression framework to determine which better predicts bank performance. The regressions indicate legal expense is a much better predictor, hence a better measure of bank corporate governance. Regulators should require legal expense reporting and rank institutions by the ratio of legal expense to assets to help identify institutions with weak governance. Seven case studies illustrate the role of legal expense in corporate governance.

Forces of globalization have driven international convergence in corporate governance and accounting considerably over the past few decades. Nevertheless, despite the global trend, convergence of corporate governance and financial reporting remains a subject of debate. This research monograph critically examines whether China’s convergence with Anglo-American corporate governance principles and the International Financial Reporting Standards (IFRS) is likely to produce the expected outcomes of improving the transparency and comparability of accounting information in Chinese firms. In this chapter, we discuss the motivation for and the significance of the study; describe the issues associated with the adoption of internationally acceptable standards and principles in China; explain the theoretical framework used to inform the study and research methodology; and present the aim and objectives of the monograph.

Purpose – The objective of this paper is to examine how state-owned entities (SOEs) engage with the requirements of the corporate governance code in an African developing economy (Mauritius).

Approach – A content analysis of the annual reports of SOEs and National Audit Office (NAO) reports is undertaken. This is supplemented by semi-structured interviews with relevant directors and regulatory bodies.

Findings – We report a substantial non-implementation of the code and identify several impediments to the transposing of the corporate governance model to the state-owned entities. The salient issues relate to the inadequate definition of SOEs in the code, the different conceptualisations of ownership and accountability, the influence of political rivalries and the low level of financial accountability in SOEs. We also consider our findings in relation to the theoretical perspectives of ‘efficiency gains’ and ‘social legitimation’.

Originality/value – Very few studies have looked into the applicability of codes of corporate governance in SOEs. In spite of the prominence of SOEs in many African developing countries, empirical evidence on corporate governance implementation in such entities has been scant.

Recommendations/implications – The findings are of relevance to policy-makers and regulators who seek to rely on mainstream corporate governance principles and practices to enhance the accountability and transparency of SOEs. Key enabling conditions for corporate governance implementation involve a depoliticisation of board appointments and a redefinition of the accountability relationships between SOEs and their ultimate owner (i.e. elected representatives and taxpayers).

The chapter builds on the literature of Agency and Signalling Theories to analyse the corporate governance factors associated with the voluntary decision to prepare an Integrated Report according to the <IR> International Framework promoted by the IIRC.

The chapter is based on the results of a probit regression run with regard to a sample of 35 companies that joined the Pilot Programme in 2011 and 137 similar companies that did not.

The analysis of two samples of European companies reveals that adhesion to the IR Pilot Programme is positively related to the gender diversity and size of the board.

Further research is required in order to study the differences between listed and non-listed companies in terms of variables affecting the adoption of the <IR> Framework and to increase the time range of our study. In addition, it would be interesting to include other variables capturing different aspects other than corporate governance, since the decision to join the Programme, as the results of our analysis have shown, may also be influenced by other factors, such as strategy decisions and communication policies.

The chapter adds to the existing literature by showing the main governance characteristics that impact the decision to adhere to the IR Pilot Programme. It is also important to the existing literature regarding the role played by gender diversity in corporate governance mechanisms and CSR policies.

Conceptual Paper

Purpose of paper – The study investigates the association between corporate governance mechanisms (proportion of finance experts on the audit committee, PFAC; frequency of board meetings, FBMG and proportion of non-executive directors, PNED), dual language reporting (DULR) (in English and Swahili) and timeliness of annual reports (TIME) of companies listed on the Nairobi Stock Exchange (NSE) in Kenya.

Design/methodology/approach – The data for the analysis is gathered from annual reports of 36 companies listed on the NSE for two financial years ending in 2005 and 2006. Ordinary least square (OLS) is used to determine the association between the corporate governance mechanisms, DULR and TIME. Company size (SIZE), gearing (GEAR), profitability (PROF) and industry (INDS) are used as control variables.

Findings – The findings suggest that there is a significant negative relationship between corporate governance mechanisms (PFAC and FBMG), DURL and TIME. Consistent with extant research, the study also found that SIZE and INDS are significantly associated with TIME. No significant association is found between PNED, GEAR, PROF and TIME.

Research limitations/implications – The findings of the research will help Kenyan policy makers and practitioners in formulating corporate governance policies. However our research is limited, among others, because it focuses on only companies listed on the NSE. The results may therefore not be representative of all companies operating in Kenya.

Originality/Value of paper – The value of the paper lies in that the results provide, for the first time, evidence of the relationship between corporate governance mechanisms (PFAC, FBMG and PNED), DURL and timeliness of the annual reports.

Purpose – The purpose of this study is to examine the impact of corporate governance characteristics on audit report timeliness in Malaysia. The corporate governance characteristics examined are board independence, audit committee size, audit committee meetings and audit committee members' qualifications.

Design/Methodology/Approach – The sample comprises of 703 Malaysian listed companies from Bursa Malaysia, for the year 2009. It excludes companies from the finance-related sector as they operate under a highly regulated regime under supervision by the Central Bank of Malaysia. Further, regression analysis was performed to examine the audit report timeliness determinants.

Findings – Results show that audit report timeliness is influenced by audit committee size, auditor type, audit opinion and firm profitability. However, no association was found between board independence, audit committee meetings, audit committee members' qualifications and audit report timeliness.

Research limitations/Implications – It is a cross-sectional study of the year 2009. Practical implications for policy makers are consideration of the minimum submission period for audit reports Regulators' support for firms to have larger audit committee sizes is also discussed.

Originality/Value – The study investigates the impact of corporate governance on audit timeliness in light of the recent amendments to the Malaysian Code of Corporate Governance made in 2007.

Purpose of this paper – This study investigates compliance with the corporate governance code in an African developing economy (Mauritius).

Methodology/approach – We examine the annual reports of 41 listed companies to assess the extent of compliance with the code and to analyze the wording of compliance statements. We also carry out in-depth semi-structured interviews with selected company directors to understand the reasons for compliance (or non-compliance).

Findings – Initial findings indicate a reasonable level of compliance with the more visible requirements of the code but noteworthy non-compliance also emerges, particularly in relation to the low number of company boards being chaired by independent directors, to uncertainties on the actual operation of board committees, and to the widespread non-disclosure of directors’ remuneration. Furthermore, compliance statements were found to be vague, ambiguous, or even inconsistent with the extent of compliance disclosed in the reports. We believe these are indications that many of the companies are adhering selectively with the code to project an image of symbolic compliance. Our in-depth follow-up interviews with directors largely confirm this behaviour of selective compliance.

Research implications – We suggest that the pursuit of legitimacy as an operational resource – rather than efficiency-led rationales – emerges as a potential theoretical explanation for the adoption of the corporate governance code in Mauritius.

Originality /value of paper – We bring evidence on how the corporate governance code is being understood and rationalized in a developing economy. We rely on a combination of annual report disclosures, compliance statements, and interview data to investigate corporate governance compliance.