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Do culture and governance structure influence extent of corporate risk disclosure?

Author

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  • Ben Kwame Agyei-Mensah
  • Samuel Buertey

Abstract

Purpose - The purpose of this paper is to study the relationship between culture, corporate governance (CG) variables and corporate risk reporting practices of listed companies in Nigeria and South Africa, two large African economies at the south of the Sahara. Design/methodology/approach - The study uses 500 firm-year observations for the period of 2013–2017 for firms listed on the Lagos and Johannesburg Stock Exchanges. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which constitutes the main data analysis. Findings - The results indicate that power distance is negatively associated with the corporate risk disclosure (CRD). This implies that organizations where power distance is high are characterized by lower CRD and vice versa. From the analysis, two factors, namely, institutional ownership and profitability, were found to explain sample firms’ risk disclosure practices as they are positively and statistically related to CRD. Originality/value - This study is one of the few to measure the influence of culture and CG on CRD in Sub-Sahara Africa. Understanding the drivers for firms to disclose risk-related information may assist regulators and standards setters in promoting both the spread and the improvement of such disclosures through the issuance of CG codes and reporting guidelines.

Suggested Citation

  • Ben Kwame Agyei-Mensah & Samuel Buertey, 2019. "Do culture and governance structure influence extent of corporate risk disclosure?," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 15(3), pages 315-334, May.
    • Handle: RePEc:eme:ijmfpp:ijmf-09-2017-0193
    DOI: 10.1108/IJMF-09-2017-0193
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    Citations

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    Cited by:

    1. Fouad Jamaani & Manal Alidarous & Abdullah Al-Awadhi, 2021. "The Early Impact of Government Financial Intervention Policies and Cultural Secrecy on Stock Market Returns During the COVID-19 Pandemic: Evidence From Developing Countries," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(2), pages 401-416, April.
    2. Beata Zyznarska-Dworczak & Kristina Rudžionienė, 2022. "Corporate COVID-19-Related Risk Disclosure in the Electricity Sector: Evidence of Public Companies from Central and Eastern Europe," Energies, MDPI, vol. 15(16), pages 1-21, August.
    3. AlKhawaldeh Afaf Mohammed & Saaydah Mansour Ibrahim, 2022. "Determinants of Corporate Risk Disclosure for Non- Financial Companies Listed on Amman Stock Exchange," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 152-177.

    More about this item

    Keywords

    Culture; Nigeria; South Africa; Financial reporting; Risk disclosure; G3; M1; M2; M4;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

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