Corporate governance and risk disclosure: evidence from integrated reporting adopters

Abstract

Purpose This study aims to examine the impact of corporate governance attributes, in the form of board characteristics, on risk disclosures provided through integrated reporting (IR). Design/methodology/approach Drawing upon an agency theory perspective, this study examines the effect of the main corporate governance board characteristics (size, gender diversity, independence and meeting frequency) on the level of risk disclosure provided by a sample of 95 IR adopters from 24 countries for 2018. Findings The results suggest that firms are slow to realise IR’s potential to produce innovations in risk disclosure mechanisms. In addition, certain board characteristics, such as gender diversity, independence of directors and meeting frequency, are positive drivers of the risk disclosure provided via IR. Originality/value To the best of the authors’ knowledge, this is the first study that investigates the impact of corporate governance mechanisms on risk disclosure provided via IR. Connecting corporate governance mechanisms to IR risk disclosure practices can contribute to enhancing the practical and theoretical understanding of the role that the board of directors may play in stimulating transparency and accountability about risks via an alternative communication tool, IR, to the benefit of both investors and other stakeholders.