An Investigation of the Impact of Corporate Governance Mechanisms on Level of Corporate Risk Disclosure: Evidence from Kuwait

Authors

  • Bader Al-Shammari Associate Professor at the Public Authority for Applied Education and Training,

DOI:

https://doi.org/10.18533/ijbsr.v4i6.491

Keywords:

corporate governance, risk disclosure, content analysis, Kuwait

Abstract

This study investigated the association between corporate governance mechanisms and corporate risk disclosure (CRD) in the annual reports for a sample of 109 Kuwaiti listed non-financial companies in 2012. The study used a manual content analysis to measure risk disclosure by counting the number of risk-related sentences in annual reports. A multiple regression analysis was used to test the impact of board size, non-executive directors, percentage of family members on board, role duality, and audit committee on CRD. The quantity of risk disclosures in the Kuwaiti companies' annual reports was very limited. The results showed that the larger board size has a positive impact on CRD. However, the findings also indicated the existence of role duality lead to lower risk disclosure. Other corporate governance mechanisms did not explain variation in CRD.

Author Biography

Bader Al-Shammari, Associate Professor at the Public Authority for Applied Education and Training,

Dr. Bader Al-Shammari earned his Ph.D at the University of Western Australia, Perth in 2005. Currently he is an associate professor of College of Business Studies, the Public Authority for Applied Education and Training, Kuwait. He is an editorial board member of Afro-Asian Journal of Finance and Accounting. He has research interest in enforcement and compliance with International Financial reporting Standards by the Middle Eastern countries, voluntary disclosure, corporate governance and cost of quality reporting. He has published in International Journal of Accounting, Journal of International Business and Economics, Review of Business Research and the Middle East Business and Economic Review.

References

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Alfredson, K., Leo, K., Picker, R., Pacter, P., Radford, J. and Wise, V. 2007. Applying International Financial Reporting Standards, enhanced edition, Wiley, Milton.

Amran, A., Bin, A.M.R., and Hassan, B.C.H.M. 2009. Risk reporting: an exploratory study on risk management disclosure in Malaysian annual reports. Managerial Auditing Journal, 24 (1): 39-57.

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Published

2014-06-20

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