The effects of corporate governance characteristics on corporate governance disclosure: evidence from Saudi-listed companies

• Main Author: Bakor, Omar Maadi
• Format: Thesis
• Language: English; English
• Published: 2021
• Subjects: HD2709-2930.7 Corporations
• Online Access: https://etd.uum.edu.my/9585/1/depositpermission_s94615.pdf; https://etd.uum.edu.my/9585/2/s94615_01.pdf; https://etd.uum.edu.my/9585/

This thesis examines the relationship between corporate governance (CG) mechanisms and CG disclosure among companies in the Saudi Stock Exchange (Tadawul). Three categories of corporate governance mechanisms (board of directors’ characteristics, audit committee’s characteristics, and structure of ownership) were employed using a sample of 122 companies for the year 2016. The first category, namely the board of directors’ characteristics consists of board size, board independence, board meetings, board compensation, board qualification and board experience. The second category, audit committee’s characteristics, consists of audit committee’s size, experience, independence, meetings, compensation committee, qualification and experience. The third category, structure of ownership consists of managerial ownership, government ownership, and institutional ownership. This study incorporates three moderating variables namely foreign ownership, audit quality and debt ratio that could influence such relationship. Based on agency theory, the current study used several multiple regression models to analyze the data. Model 1 tests the relationship between CG disclosure and all the seventeen variables included in the study. Models 2, 3 and 4 tests the moderating effect of foreign ownership, audit quality, and debt ratio on the relationship between CG disclosure and the three categories of corporate governance mechanisms. The statistical results demonstrated that board size, board meeting, board independence, audit committee independence and audit committee meetings were the positive factors of corporate governance disclosure. In contrast, a negative relationship was identified between audit committee meetings and board experience, audit committee experience, audit committee qualification and government ownership. In respect of the control variables, firm size showed a positive relationship, while profitability indicated a negative relationship with corporate governance disclosure. The current study provided several policy implications for accounting regulators (the Capital Market Authority) to strengthen the mechanism of corporate governance disclosure and enable Saudi companies to enhance corporate governance disclosure for enhanced investors’ confidence in the market.