Do culture and governance structure influence extent of corporate risk disclosure?
International Journal of Managerial Finance
ISSN: 1743-9132
Article publication date: 13 May 2019
Issue publication date: 31 July 2019
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.
Keywords
Citation
Agyei-Mensah, B.K. and Buertey, S. (2019), "Do culture and governance structure influence extent of corporate risk disclosure?", International Journal of Managerial Finance, Vol. 15 No. 3, pp. 315-334. https://doi.org/10.1108/IJMF-09-2017-0193
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited