Found 4 swedish dissertations containing the words corporate disclosure practices. Society acknowledges that companies’ operations have an effect on their business environment. As a result, companies are not only responsible for maximization of shareholder value, but also for the impact of their environmental and social policies. Read more university dissertation from department of law found 4 swedish dissertations containing the words corporate social responsibility disclosure. Read more university dissertation from department of law this section reviews the extensive literature academic, legislative and policy, in the field of corporate governance and voluntary disclosures with a view to identify the gaps, if any, in existing research in terms of voluntary disclosure studies in india. Based on the literature, a hypothesis is postulated on the on relationship between firm level attributes and the extent of voluntary disclosures in the top 100 indian companies listed on the bse. The first section discusses the definition, significance and theoretical foundations of corporate governance and the role of voluntary disclosures within the corporate governance agenda.

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The second part highlights the evolution and state of corporate governance principles in india. After having analysed the literature and evidence the third part develops the hypotheses in relation to firm level attributes. According to the uk corporate governance code, corporate governance is the system by which companies are directed and controlled. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place.

The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. This definition of corporate governance was produced by the cadbury committee in 1992 and still forms the context for the code. Explaining its role further, sir cadbury states that corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources.

The aim is to align as nearly as possible the interests of individuals, corporations and society sir adrian cadbury in 'global corporate governance forum', world bank, 20. The international chamber of commerce explains corporate governance as a relationship between corporate managers, directors and the providers of equity, people and institutions who save and invest their capital to earn a return. It ensures that the board of directors is accountable for the pursuit of corporate objectives and that the corporation itself conforms to the law and regulations. Furthermore, as mentioned above, cg also encompasses the relationship between the corporation and the stakeholders and society at large millstein, 1998. Though the cg codes, regulations and practices may vary from country to country, according to the millstein report 1998 , there are four core principles of corporate governance: fairness, transparency, accountability and responsibility.

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Fairness by ensuring the protection of shareholder rights and the equitable treatment of all shareholders transparency by the timely and quality disclosure of adequate, clear and comparable information concerning corporate performance, governance and ownership oecd, 2004. Disclosures most commonly include, but are not restricted to information on the company’s financial situation and performance. In fact, the level and extent of disclosures is an important benchmark in measuring the quality of cg aksu and kosedag, 2006. Wolfensohn, the incumbent president of the world bank, likens the importance of governance of the corporation to the government of countries mohamad, 2004. The failures of individual companies like enron, satyam and the financial crisis in east asia to the recent sub prime collapse and economic downturn all show elements of failed or inefficient cg and lack of transparency. A survey of institutional investors by r.f.felton et al 1996 found that they would willingly pay on average well over ten percentage points more for a well governed company, all other things being equal mohamad, 2004. Agreeing with this view, bopkin and isshaq 2009 and la porta et al 1998 suggest in their separate articles that investors would be more willing to provide finance in countries/companies that can provide greater protection through good cg practices.

Good disclosures are particularly relevant in this capacity as they help to reduce information asymmetry, thereby lowering the investor’s risk bushman and smith, 2001 ball, kothari and robin, 20 and reducing the volatility of a firm’s stock lang and lundholm, 1996. The role of disclosures in securing cheap, long term capital becomes particularly important in developing countries that rely much on foreign direct investments and financial investment salter, 1998. Development of capital markets – efficient governance mechanisms such as mechanism for investor protection is a quintessential for the development of capital markets rabelo and vasconcelos, 2002. Akhtaruddin 2005 opines that effective functioning of capital markets significantly depends on the effective flow of information between the company and its stakeholders.

Its ability to meet the expectations of society – cg and transparency enables a corporation to function in a fair and judicious manner by providing appropriate checks against the possible immoderation of management patel et al, 2002 and against the excessive exploitation of societal and environmental resources. In encouraging accountability and transparency and adherence to existing regulations, it can also help combat corrupt and unlawful practices amongst businesses. Haat, rahman and mahenthiran 2008 opine that greater corporate governance and disclosure practices may not totally eliminate corporate failure, but could at least provide the ‘’red flag’’ to stakeholders and to regulators.

Its overall performance – many studies have found association between good corporate governance practices and overall profitability of the company. A study carried out by millstein and macavoy in the united states analyzing data from 1991 1995 found that u.s. Corporations with active and independent boards of directors generated higher economic profit. According to charreaux’s taxonomy, theories explaining the concept and role of corporate governance can be classified into micro level theories and macro level theories. Micro theories of corporate governance propose a model of how a company and its managers are governed whereas macro theories account for the specificities and variation in the governance systems found in different nations.

For the purpose of this research, one of the micro theories, the agency theory, as postulated by jensen and meckling 1976 is adopted as the theoretical framework and the cg practices are offered as solutions to the problems posted by it. According to jenkins and meckling, in the modern corporation, the ownership of capital is divorced from its management and that there exists a contractual agreement between the two i.e. The shareholders are the principal and the managers are the agents who act on their behalf.

In an agency relationship, information asymmetry exists commonly managers have an information advantage which they may misuse for their own vested interest or which may give rise to conflict of interests. Conversely the managers may use the advantage positively to disclose more information to enhance the value of the firm and boost investment barako, hancock and izan, 2006. The nature of agency problem is quite different in developed countries and in developing countries la porta et al. In developed countries, the agency problem is between managers and shareholders whereas in developing countries this exists between majority and minority shareholders la porta et al. And hence, instead of the tradition principal agent model, a modified version known as the principal principal pp model of corporate governance young et al. 2008 , which can be seen as a synthesis of micro and macro theories of governance, has been put forth. According to young et al, principal–principal conflicts between controlling shareholders and minority shareholders result from concentrated ownership, extensive family ownership and control, business group structures, and weak legal protection of minority shareholders.

2002 opine that the agency problem in corporate governance can be resolved in many ways – by a vigilant board of directors, by timely, accurate and sufficient disclosure of financial information and by transparency in the ownership structure. Through the benchmarking exercise this research attempts to evaluate the extent to which such solutions are embedded in indian companies and then focuses on one particularly pertinent issue of disclosure and transparency. The most important aspect of corporate governance is transparency and disclosure. According to the principles of corporate governance by the oecd it is essential that the organizations disseminate timely and accurate information about all the matters that are concerned to the financial situation, performance, ownership and the overall governance of the organization. This information is disclosed through the annual reports published by the companies. This dissemination of financial and non financial information through corporate annual reports is a function of acts and regulations in the corporate sector ahmed, 2006.

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The extent to which the companies disclose the related information in the annual reports indicates the degree of transparency of the company and sometimes also known as corporate transparency or corporate disclosure naser and nuseibeh 2003. Various empirical studies have been conducted by different researchers on the degree of disclosure of information in the annual reports. The approach widely used is to determine the degree to which the specific attributes or items of information are disclosed in the annual reports. It is the major reporting document and every other financial report is in some respect, subsidiary or supplementary to it. A disclosure index is defined as a weighted list of investor list of investor related information items which could appear in the firm’s annual report firer c, 1986. These indices are constructed on the basis of either the researchers study or the existing literature of corporate reporting.

The disclosure index is a statistic or a matrix that captures the extent of disclosure by a firm on an item in the list. These indices which were constructed to determine the quality and degree of disclosure in annual reports differ significantly from one study to another, although all share the central idea of usefulness of information for the purpose of making investment related decisions inchausti, 1997. 72 items of disclosure formed the part of index belonging to the categories of 1 corporate environment like general corporate information, information about directors, specific corporate information 2 social responsibility like employee information, social policy 3 financial information viz. Corporate strategy, management discussion amp analysis amp future prospects 2 financial info and 3 non financial info viz. Is employee information total of 224 items distributed in the subgroups of the financial statements, financial history, disclosure of projection and budget, ratios amp segmental info etc.