Voluntary Disclosures in Financial Reporting Among Listed Companies in Ghana: Does Corporate Governance Play a Part?

Abstract

Corporate disclosure has been said to be very important as it increases the confidence of both shareholders and potential investors. This has led users of financial information to have intensified expectation for both statutory and voluntary disclosures to meet their needs. Since voluntary disclosures are based on the discretion of management, it is therefore necessary to examine whether corporate governance play a major role in voluntary disclosures. The purpose of this paper was to investigate the relationship between corporate governance and voluntary disclosure of firms listed on the Ghana Stock Exchange. The study investigated 31 firms using dynamic panel data from 2005 to 2015. It was evident that current disclosure is influenced by past disclosure indicating a trend in voluntary disclosure overtime. The study revealed that board compensation, board gender diversity and ownership structure have a statistically significant positive relationship with the level of voluntary disclosure. However, board size tends to negatively influence voluntary disclosure while no correlation was found between non-executive directors, audit committee independence and voluntary disclosure.

Keywords: Voluntary disclosure, corporate governance, board compensation, audit committee