Gender Diversity, Corporate Governance and Financial Risk Disclosure in the UK
International Journal of Law and Management, February 2020
27 Pages Posted: 14 May 2020
Date Written: 2020
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.
Keywords: Financial Risk Disclosure, Block Ownership, Gender Diversity, Board Size, Corporate Governance
JEL Classification: G21, G32, G34, G38, M48
Suggested Citation: Suggested Citation