Effect of Corporate Governance Rules on Voluntary Disclosure in Jordanian Corporations Listed with the Amman Stock Exchange (ASE): (An Empirical Study)

Open access

Abstract

This paper aims to examine the impact of corporate governance (CG) rules using several variables—size of the board of directors, size of the audit committee, family ownership ratio, and their impact on the level of the voluntary disclosure of companies listed with Amman Stock Exchange (ASE). The study was conducted based on the annual reports of the first market that include 55 firms. Content analysis was applied to collect the required data from several sectors (financial, insurance, services, and industrial sectors) from 2016 to 2017.The results indicate a negative association among family ownership ratio, size of the audit committee, and voluntary disclosure level. However, the study shows that the size of the board of directors has a significant positive relationship with the level of voluntary disclosure. Furthermore, the results show that CG rules (size of the board of directors, size of the audit committee, and family ownership ratio) have a significant positive relationship with the voluntary disclosure level of the companies listed with ASE. In the borderline market environment, the study contributes to a theoretical understanding of the corporate governance of voluntary disclosure and the relationship between corporate governance mechanisms and voluntary disclosure. The outcomes provide empirical support for the theoretical notion that effective corporate governance plays an important role in increasing the extent of voluntary disclosure.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Abed Al-Nasser Abdallah Ahmad K. Ismail (2017) CG practices ownership structure and corporate performance in the GCC countries (2017) Journal of International Financial Markets Institutions and Money Volume 46 January 2017 Pages 98-115.

  • Abubakar M. Dembo Syamarlah Rasaratnam (2014) Corporate Governance and Disclosure in Nigeria: An Empirical Study Procedia - Social and Behavioral Sciences Volume 164 31 December 2014 Pages 161-171.

  • Amer Alhazaimeh Ravindran Palaniappan Mahmoud Almsafir (2014) The Impact of Corporate Governance and Ownership Structure on Voluntary Disclosure in Annual Reports among Listed Jordanian Companies Procedia - Social and Behavioral Sciences Volume 129 2014 Pages 341-348 ISSN 1877-0428 http://dx.doi.org/10.1016/j.sbspro.2014.03.686.

  • Ana Gisbert Begoña Navallas (2013) The association between voluntary disclosure and Corporate Governance in the presence of severe agency conflicts Advances in Accounting Volume 29 Issue 2 2013 Pages 286-298 ISSN 0882-6110 http://dx.doi.org/10.1016/j.adiac.2013.07.001.

  • Caspar Rose (2016) Firm performance and comply or explain disclosure in corporate governance European Management Journal Volume 34 Issue 3 June 2016 Pages 202-222.

  • Christopher Hodgdon Susan B. Hughes (2016) The effect of corporate governance auditor choice and global activities on EU company disclosures of estimates and judgments Journal of International Accounting Auditing and Taxation Volume 26 2016 Pages 28-46.

  • Eduardo Ortas Igor Álvarez Jacques Jaussaud Ainhoa Garayar (2015) The impact of institutional and social context on corporate environmental social and governance performance of companies committed to voluntary corporate social responsibility initiatives Journal of Cleaner Production Volume 108 Part A 1 December 2015 Pages 673-684 .

  • Ehtazaz Javaid Lone Amjad Ali Imran Khan (2016) “ Corporate Governance and corporate social responsibility disclosure: evidence from Pakistan” Corporate Governance: The International Journal of Business in Society Vol. 16 Issue: 5 pp.785-797 https://doi.org/10.1108/CG-05-2016-0100.

  • Faten Lakhal (2005) “Voluntary Earnings Disclosures and Corporate Governance: Evidence from France” Review of Accounting and Finance Vol. 4 Issue: 3 pp.64-85 https://doi.org/10.1108/eb043431.

  • Grigoris Giannarakis (2014) “ Corporate Governance and financial characteristic effects on the extent of corporate social responsibility disclosure” Social Responsibility Journal Vol. 10 Issue: 4 pp.569-590 https://doi.org/10.1108/SRJ-02-2013-0008.

  • Guadalupe del Carmen Briano-Turrent Lázaro Rodríguez-Ariza (2016) Corporate Governance ratings on listed companies: An institutional perspective in Latin America European Journal of Management and Business Economics Volume 25 Issue 2 8 May 2016 Pages 63-75.

  • Jordan Schoenfeld (2017) The effect of voluntary disclosure on stock liquidity: New evidence from index funds Journal of Accounting and Economics Volume 63 Issue 1 February 2017 Pages 51-74.

  • Khaled Samaha Khaled Dahawy Khaled Hussainey Pamela Stapleton (2012) The extent of Corporate Governance disclosure and its determinants in a developing market: The case of Egypt Advances in Accounting Volume 28 Issue 1 June 2012 Pages 168-178.

  • Laura Cabeza-García María Sacristán-Navarro Silvia Gómez-Ansón (2017) Family involvement and corporate social responsibility disclosure Journal of Family Business Strategy Volume 8 Issue 2 June 2017 Pages 109-122 .

  • Lili Dai Renhui Fu Jun-Koo Kang Inmoo Lee (2016) Corporate Governance and the profitability of insider trading Journal of Corporate Finance Volume 40 October 2016 Pages 235-253.

  • M. Akhtaruddin Hasnah Haron (2010) “Board ownership audit committees’ effectiveness and corporate voluntary disclosures” Asian Review of Accounting Vol. 18 Issue: 3 pp.245-259 https://doi.org/10.1108/13217341011089649.

  • M. Rosario Babío Arcay M. Flora Muiño Vázquez (2005) Corporate Characteristics Governance Rules and the Extent of Voluntary Disclosure in Spain Advances in Accounting Volume 21 2005 Pages 299-331 M. Rosario Babío Arcay M. Flora Muiño Vázquez.

  • Melsa Ararat Bernard S. Black B. Burcin Yurtoglu (2017) The effect of Corporate Governance on firm value and profitability: Time-series evidence from Turkey Emerging Markets Review Volume 30 March 2017 Pages 113-132.

  • Mishari M. Alfraih Abdullah M. Almutawa (2017) “Voluntary disclosure and corporate governance: empirical evidence from Kuwait” International Journal of Law and Management Vol. 59 Issue: 2 pp.217-236 https://doi.org/10.1108/IJLMA-10-2015-0052.

  • Mohamed H. Elmagrhi Collins G. Ntim Yan Wang (2016) “Antecedents of voluntary Corporate Governance disclosure: a post-2007/08 financial crisis evidence from the influential UK Combined Code” Corporate Governance Vol. 16 Issue: 3 pp.507-538 https://doi.org/10.1108/CG-01-2016-0006.

  • Murya Habbash (2016) “ Corporate Governance and corporate social responsibility disclosure: evidence from Saudi Arabia” Social Responsibility Journal Vol. 12 Issue: 4 pp.740-754 https://doi.org/10.1108/SRJ-07-2015-0088.

  • Poh-Ling Ho Grantley Taylor (2013) “ Corporate Governance and different types of voluntary disclosure: Evidence from Malaysian listed firms” Pacific Accounting Review Vol. 25 Issue: 1 pp.4-29 https://doi.org/10.1108/01140581311318940.

  • Rohana Othman Ili Farhana Ishak Siti Maznah Mohd Arif Nooraslinda Abdul Aris (2014) Influence of Audit Committee Characteristics on Voluntary Ethics Disclosure Procedia - Social and Behavioral Sciences Volume 145 25 August 2014 Pages 330-342.

  • Ronald F. Premuroso Somnath Bhattacharya (2008) Do early and voluntary filers of financial information in XBRL format signal superior Corporate Governance and operating performance? International Journal of Accounting Information Systems Volume 9 Issue 1 March 2008 Pages 1-20.

  • Simon S.M Ho Kar Shun Wong (2001) A study of the relationship between Corporate Governance structures and the extent of voluntary disclosure Journal of International Accounting Auditing and Taxation Volume 10 Issue 2 Summer 2001 Pages 139-156.

  • Syed Abdulla Al Mamun Hasnah Kamardin (2014) Corporate Voluntary Disclosure Practices of Banks in Bangladesh Procedia - Social and Behavioral Sciences Volume 164 31 December 2014 Pages 258-263.

  • Wan Ainul Asyiqin Wan Mohd Razali Roshayani Arshad (2014) Disclosure of Corporate Governance Structure and the Likelihood of Fraudulent Financial Reporting Procedia - Social and Behavioral Sciences Volume 145 25 August 2014 Pages 243-253.

  • Wan Amalina Wan Abdullah Majella Percy Jenny Stewart (2015) Journal of Contemporary Accounting & Economics Volume 11 Issue 3 December 2015 Pages 262-279.

  • Xiang Liu Chen Zhang (2017) corporate governance social responsibility information disclosure and enterprise value in China Journal of Cleaner Production Volume 142 Part 2 20 January 2017 Pages 1075-1084.

  • Xiao Huafang Yuan Jianguo (2007) “Ownership structure board composition and corporate voluntary disclosure: Evidence from listed companies in China” Managerial Auditing Journal Vol. 22 Issue: 6 pp.604-619 https://doi.org/10.1108/02686900710759406.

  • Xu-dong Ji Wei Lu Wen Qu (2015) Determinants and economic consequences of voluntary disclosure of internal control weaknesses in China Journal of Contemporary Accounting & Economics Volume 11 Issue 1 April 2015 Pages 1-17.

  • Yan Qiu Amama Shaukat Rajesh Tharyan (2016) Environmental and social disclosures: Link with corporate financial performance The British Accounting Review Volume 48 Issue 1 March 2016 Pages 102-116.

  • Yu Cong Martin Freedman Corporate Governance and environmental performance and disclosures Advances in Accounting Volume 27 Issue 2 2011 Pages 223-232 ISSN 0882-6110 http://dx.doi.org/10.1016/j.adiac.2011.05.005.

Search