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Corporate Risk Disclosure and Corporate Governance

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  • Kaouthar Lajili

    (Telfer School of Management, University of Ottawa, 55 Laurier East, Ottawa, Ontario, K1N 6N5, Canada)

Abstract

To date, research which integrates corporate governance and risk management has been limited. Yet, risk exposure and management are increasingly becoming the core function of modern business enterprises in various sectors and industries domestically and globally. Risk identification and management are crucial in any business strategy design and implementation. From the investors’ point of view, knowledge of the risk profile, risk appetite and risk management are key elements in making sound portfolio investment decisions. This paper examines the relationships between corporate governance mechanisms and risk disclosure behavior using a sample of Canadian publicly-traded companies (TSX 230). Results show that Canadian public companies are more likely to disclose risk management information over and above the mandatory risk disclosures, if they are larger in size and if their boards of directors have more independent members. Minority voting control ownership structures appear to negatively impact risk disclosure and CEO incentive compensation shows mixed results. The paper concludes that more research is needed to further assess the impact of various governance mechanisms on corporate risk management and disclosure behavior.

Suggested Citation

  • Kaouthar Lajili, 2009. "Corporate Risk Disclosure and Corporate Governance," JRFM, MDPI, vol. 2(1), pages 1-24, December.
    • Handle: RePEc:gam:jjrfmx:v:2:y:2009:i:1:p:94-117:d:28365
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    References listed on IDEAS

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    Cited by:

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    2. Moumen, Néjia & Ben Othman, Hakim & Hussainey, Khaled, 2016. "Board structure and the informativeness of risk disclosure: Evidence from MENA emerging markets," Advances in accounting, Elsevier, vol. 35(C), pages 82-97.
    3. Nadezda Gulko & Catriona Hyde & Nina Seppala, 2017. "Disclosure of corporate risks and governance before, during and after the global financial crisis: case study in the UK construction industry in 2006–2009," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 14(3), pages 207-223, August.
    4. He Zhao & Qin Heng Zhao & Beata Ślusarczyk, 2019. "Sustainability and Digitalization of Corporate Management Based on Augmented/Virtual Reality Tools Usage: China and Other World IT Companies’ Experience," Sustainability, MDPI, vol. 11(17), pages 1-17, August.
    5. Cristina Raluca Gh. Popescu, 2019. "Corporate Social Responsibility, Corporate Governance and Business Performance: Limits and Challenges Imposed by the Implementation of Directive 2013/34/EU in Romania," Sustainability, MDPI, vol. 11(19), pages 1-31, September.
    6. Songling Yang & Muhammad Ishtiaq & Muhammad Anwar, 2018. "Enterprise Risk Management Practices and Firm Performance, the Mediating Role of Competitive Advantage and the Moderating Role of Financial Literacy," JRFM, MDPI, vol. 11(3), pages 1-17, June.
    7. Bader Al-Shammari, 2014. "An Investigation of the Impact of Corporate Governance Mechanisms on Level of Corporate Risk Disclosure: Evidence from Kuwait," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(6), pages 51-70, June.
    8. Bader Al-Shammari, 2014. "An Investigation of the Impact of Corporate Governance Mechanisms on Level of Corporate Risk Disclosure: Evidence from Kuwait," International Journal of Business and Social Research, LAR Center Press, vol. 4(6), pages 51-70, June.
    9. Sawsan Halbouni & Asifa Yasin, 2016. "Risk Disclosure: Empirical Investigation of UAE Companies’ Compliance with International Accounting Standards," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(8), pages 134-134, July.
    10. Abdallah, Abed Al-Nasser & Hassan, Mostafa Kamal & McClelland, Patrick L., 2015. "Islamic financial institutions, corporate governance, and corporate risk disclosure in Gulf Cooperation Council countries," Journal of Multinational Financial Management, Elsevier, vol. 31(C), pages 63-82.

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