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Corporate COVID-19-Related Risk Disclosure in the Electricity Sector: Evidence of Public Companies from Central and Eastern Europe

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  • Beata Zyznarska-Dworczak

    (Department of Accounting and Financial Audit, Poznan University of Economics and Business, al. Niepodległości 10, 61-875 Poznań, Poland)

  • Kristina Rudžionienė

    (Institute of Social Sciences and Applied Informatics, Kaunas Faculty, Vilnius University, Muitinės Str. 8, LT-44280 Kaunas, Lithuania)

Abstract

Risk disclosures contribute to financial stability by providing stakeholders with a better understanding of companies’ risk exposures and risk management practices. Presently, corporate risk has been accelerated by the COVID-19 pandemic, and the level of disclosure varies across industries, companies, and organizations. Due to the strategic importance of the energy industry, the paper aims to assess COVID-19-related risk disclosure in the biggest electricity companies in Central and Eastern European countries, and to identify the main determinants of the disclosure. For this purpose, risk disclosure was assessed based on publicly available data disclosed by the 10 biggest public electricity companies operating in this region. Our findings indicate that factors such as the company’s size, leverage, and profitability do not significantly affect COVID-19-related risk disclosure in financial reports; nevertheless, COVID-19 risk disclosure in non-financial reports is significantly correlated with the company’s assets and revenues. Moreover, there is a significantly strong positive relationship between the scope of COVID-19-related risk disclosure in the management reports and the number of women on the company’s management board. COVID-19-related risk disclosure in management board’s reports is significantly higher than disclosure in non-financial reports and explanatory notes of financial statements. Our results suggest that risk disclosure is needed to mitigate information asymmetry, especially in pandemic situations.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:16:p:5810-:d:884810
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