Corporate Boards, Ownership Structures and Corporate Disclosures: Evidence from a Developing Country

Alnabsha, A, Abdou, Hussein, Ntim, CG and Elamer, AA (2017) Corporate Boards, Ownership Structures and Corporate Disclosures: Evidence from a Developing Country. Journal of Applied Accounting Research, 19 (1). pp. 20-41. ISSN 0967-5426

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Abstract

Purpose This paper investigates the effect of corporate board attributes, ownership structure and firm-level characteristics on both corporate mandatory and voluntary disclosure behaviour in annual reports of Libyan listed and non-listed firms. Design/methodology/approach Multivariate regression techniques are used to estimate the effect of corporate board and ownership structures on mandatory and voluntary disclosures of a sample of Libyan listed and non-listed firms between 2006 and 2010. Findings First, we find that board size, board composition, the frequency of board meetings and the presence of an audit committee have an impact on the level of corporate disclosure. Second, we find evidence that indicates that director ownership, foreign ownership, government ownership and institutional ownership have a non-linear effect on the level of corporate disclosure. Finally, we document that firm age, liquidity, listing status, industry type and auditor type are positively associated with the level of corporate disclosure. Research limitations/implications Future research could investigate disclosure practices using other channels of corporate disclosure media, such as corporate websites. Useful insights may be offered also by future studies by conducting in-depth interviews with corporate managers, directors and owners regarding these issues. Practical implications Our evidence relating to the important role that corporate governance mechanisms play in shaping the expectations relating to the level of corporate voluntary and/or mandatory disclosures may be useful in informing investor decisions, as well as future policy and regulatory initiatives. Originality/value Existing disclosure studies have mainly examined governance and voluntary disclosure relationship in listed firms often operating in developed countries. Our study, therefore, extends, as well as contributes to the existing literature by examining the governance–disclosure nexus relating to both mandatory and voluntary disclosures in both listed and non-listed firms operating in a developing country setting.