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Gender diversity, corporate governance and financial risk disclosure in the UK

Gender diversity, corporate governance and financial risk disclosure in the UK
Gender diversity, corporate governance and financial risk disclosure in the UK
Purpose – This study investigates the impact of corporate governance mechanisms on financial risk reporting in the UK.

Design/methodology/approach – The study uses a panel data of 50 non-financial firms belonging to ten industrial sectors listed on the London Stock Exchange in the period 2011-2015. Multivariate regression techniques are used to examine the relationships. Additionally, to alleviate the concern of potential endogeneity, we use two-stage least squares and fixed effect estimators.

Findings – The findings of this study reveal that corporate governance has a significant influence on financial risk disclosure. Specifically, we find that block ownership and board gender diversity have a positive effect on the level of corporate financial risk disclosure. While, there is no significant relationship between board size and corporate financial risk disclosure.

Originality/value – This study adds to the emerging body of literature on corporate governance–risk disclosure relationship in UK context using content analysis. The study also highlights that gender diversity enhances financial risk disclosure.
Financial risk disclosure, block ownership, gender diversity, board size, corporate governance
1754-243X
Bufarwa, Idris M.
5f524144-0429-4271-8954-e5e62efbff15
Elamer, Ahmed A.
41f0a000-ef97-4e6b-b741-d755def01823
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Bufarwa, Idris M.
5f524144-0429-4271-8954-e5e62efbff15
Elamer, Ahmed A.
41f0a000-ef97-4e6b-b741-d755def01823
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b

Bufarwa, Idris M., Elamer, Ahmed A. and Ntim, Collins (2020) Gender diversity, corporate governance and financial risk disclosure in the UK. International Journal of Law and Management.

Record type: Article

Abstract

Purpose – This study investigates the impact of corporate governance mechanisms on financial risk reporting in the UK.

Design/methodology/approach – The study uses a panel data of 50 non-financial firms belonging to ten industrial sectors listed on the London Stock Exchange in the period 2011-2015. Multivariate regression techniques are used to examine the relationships. Additionally, to alleviate the concern of potential endogeneity, we use two-stage least squares and fixed effect estimators.

Findings – The findings of this study reveal that corporate governance has a significant influence on financial risk disclosure. Specifically, we find that block ownership and board gender diversity have a positive effect on the level of corporate financial risk disclosure. While, there is no significant relationship between board size and corporate financial risk disclosure.

Originality/value – This study adds to the emerging body of literature on corporate governance–risk disclosure relationship in UK context using content analysis. The study also highlights that gender diversity enhances financial risk disclosure.

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More information

Accepted/In Press date: 10 February 2020
Published date: 20 November 2020
Keywords: Financial risk disclosure, block ownership, gender diversity, board size, corporate governance

Identifiers

Local EPrints ID: 452950
URI: http://eprints.soton.ac.uk/id/eprint/452950
ISSN: 1754-243X
PURE UUID: a7a3c466-2fb1-44ed-b7bc-7ff75c0618e8
ORCID for Collins Ntim: ORCID iD orcid.org/0000-0002-1042-4056

Catalogue record

Date deposited: 07 Jan 2022 11:45
Last modified: 17 May 2022 01:27

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Contributors

Author: Idris M. Bufarwa
Author: Ahmed A. Elamer
Author: Collins Ntim ORCID iD

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