Determinants of corporate governance disclosure in Saudi Arabia

Al-Moataz, E and Hussainey, Khaled (2013) Determinants of corporate governance disclosure in Saudi Arabia. Journal of Economics and Management.

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Abstract

Purpose – Our paper’s purpose is to examine the relation between some corporate governance mechanisms and the disclosure level of corporate governance information in the Saudi Arabian’s listed companies. It aims to deepen our understanding of the main drivers of corporate governance reporting in one of the developing countries. Methodology – Using a sample of 97 financial reports and accounts of Saudi Arabian listed companies in 2006 and 2007, the paper uses the content analysis approach to analyse the content of these reports. In addition, a multiple regression model is used to identify the determinants of corporate governance disclosure. In this regression model, corporate governance disclosure score is the dependent variable, while the firm characteristics (firm’s profitability, liquidity, debt ratio and size) and corporate governance mechanisms (board independence, audit committee size) are the independent variables. Findings – We find that board independence, audit committee size, profitability, liquidity and gearing are the main determinants of corporate governance disclosure in Saudi Arabia. We did not find any statistically significant association between firm size and corporate governance disclosure. Originality – The paper contributes to literature on disclosure and corporate governance in two important ways. First, it provides evidence on the determinants of corporate governance reporting in a developing country, Saudi Arabia. The research on this area has been largely absent in developing countries in general and in Middle Eastern countries in particular. Second, it offers some insights into the governance mechanisms and corporate characteristics that significantly drive the disclosure of corporate governance information.

Item Type: Article
Article Type: Article
Uncontrolled Keywords: Corporate governance, Voluntary disclosure, Firm characteristics, Saudi Arabia
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HG Finance > HG4001 Finance management. Business finance
Divisions: Faculty of Business, Computing and Applied Sciences > Business School > Accounting and Finance
Research Priority Areas: Applied Business Research
Depositing User: Ineke Tijsma
Date Deposited: 10 Mar 2015 12:54
Last Modified: 22 Oct 2015 15:39
URI: http://eprints.glos.ac.uk/id/eprint/1391

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