Voluntary Corporate Governance Disclosure Innovative Evidence: The Case of Jordan
DOI:
https://doi.org/10.6000/1929-7092.2017.06.45Keywords:
Jordan, corporate governance codes, voluntary corporate disclosure, governance index, industrial sectorAbstract
This paper aimed to assess the corporate governance voluntary disclosure level and the impact of a set of corporate governances (CG) attributes on the level to which corporate governance voluntary disclosure is conducted in Jordan. Another objective was to determine if Jordanian industrial listed corporations adhere to and disclose good CG practices voluntarily, and if they do, to determine the factors influencing such disclosure. This study employed 61 industrial listed firms for the years 2010-2014. The research developed a general voluntary CG disclosure index composing of 15 Jordanian Corporate Governance Codes and gauged the relationship via pooled OLS and regression method. The results indicated that the proposed Jordanian Corporate Governance Index (JCGI) enhanced voluntary corporate governance disclosure among Jordanian listed firms over the examined years. They also showed varying levels of CG disclosures in different scenarios; 1) it is lower in firms with higher managerial ownership and 2) higher relative to the independent directors' proportion on the board, audit firm size, and audit committee presence with institutional ownership. Evidence on the compliance level towards the CG code in Amman Stock Exchange is unique and the study is distinct as it provides a pioneering evidence of the achieved compliance level.
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Krenn, M. (2014). Decoupling as a sustainable firm response to pressures for convergence and divergence in corporate governance: The case of codes of good corporate governance. Journal of Management Policy and Practice, 15(4), 103. North American Business Press.
Ntim, C. G., Opong, K. K. & Danbolt, J. (2012). The relative value relevance of shareholder versus stakeholder corporate governance disclosure policy reforms in South Africa. Corporate Governance: An International Review, 20(1), 84-105. Wiley Online Library.
https://doi.org/10.1111/j.1467-8683.2011.00891.x
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https://doi.org/10.2139/ssrn.1535073
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https://doi.org/10.1016/j.econmod.2013.08.015
https://doi.org/10.1016/j.jfineco.2010.10.018
Albassam, W. (2014). Corporate governance, voluntary disclosure and financial performance: ban empirical analysis of Saudi listed firms using a mixed-methods research design.
Allegrini, M. & Greco, G. (2013). Corporate boards, audit committees and voluntary disclosure: evidence from Italian Listed Companies. Journal of Management & Governance, 17(1), 187-216. Springer.
https://doi.org/10.1007/s10997-011-9168-3
Ammann, M., Oesch, D. & Schmid, M. M. (2013). Product Market Competition, Corporate Governance, and Firm Value: Evidence from the EU Area. European Financial Management, 19(3), 452-469. Wiley Online Library.
https://doi.org/10.1111/j.1468-036X.2010.00605.x
Ararat, M., Black, B. S. & Yurtoglu, B. B. (2016). The effect of corporate governance on firm value and profitability: Time-series evidence from Turkey. Emerging Markets Review. Elsevier.
Barako, D. G., Hancock, P. & Izan, H. (2006). Factors influencing voluntary corporate disclosure by Kenyan companies. Corporate Governance: An International Review, 14(2), 107-125. Wiley Online Library.
https://doi.org/10.1111/j.1467-8683.2006.00491.x
Beattie, V., McInnes, B. & Fearnley, S. (2004). A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes. Accounting forum (Vol. 28, pp. 205-236).
https://doi.org/10.1016/j.accfor.2004.07.001
Bebchk, L. A. & Weisbach, M. S. (2010). The state of corporate governance research. Review of Financial Studies, 23(3), 939-961. Soc Financial Studies.
https://doi.org/10.1093/rfs/hhp121
Bouwman, C. H. (2011). Corporate governance propagation through overlapping directors. Review of Financial Studies, 24(7), 2358-2394. Soc Financial Studies.
https://doi.org/10.1093/rfs/hhr034
Chalevas, C. G. (2011). The effect of the mandatory adoption of corporate governance mechanisms on executive compensation. The International Journal of Accounting, 46(2), 138-174. Elsevier.
https://doi.org/10.1016/j.intacc.2011.04.004
Chen, C.-H. V. & .Cheng, T.-Y. D. (2011). Investigating the relation-ships between CEO duality, shareholding and entrepren-eurial performance: the mediating effect of R&D intensity. International Journal of Management and Enterprise Development, 11(1), 52-68. Inderscience Publishers.
https://doi.org/10.1504/IJMED.2011.042972
Chung, K. H. & Zhang, H. (2011). Corporate governance and institutional ownership. Journal of Financial and Quantitative Analysis, 46(01), 247-273. Cambridge Univ Press.
https://doi.org/10.1017/S0022109010000682
Cuomo, F., Mallin, C. & Zattoni, A. (2015). Corporate Governance Codes: A Review and Research Agenda. Corporate Governance: An International Review, 24(3), 222-241. Wiley Online Library.
https://doi.org/10.1111/corg.12148
EI-Faitouri, R. (2012). An Investigation of Corporate Governance Mechanisms and Value Creation in the United Kingdom. The University of Liverpool.
Eng, L. L. & Mak, Y. T. (2003). Corporate governance and voluntary disclosure. Journal of accounting and public policy, 22(4), 325-345. Elsevier.
https://doi.org/10.1016/S0278-4254(03)00037-1
Fama, E. F. & Jensen, M. C. (1983). Separation of ownership and control. Journal of law and economics, 301-325. JSTOR.
https://doi.org/10.1086/467037
Governance code of listed corporations in France, C. (2013). corporate governance code of listed corporations.
https://doi.org/10.1162/00335530360535162
GCGCGC. (2014). Government Commission of the German corporate governance code, 2014. Available at: http://www.corporate-governance-code.de/index-e.html.
Gompeers, P. A., Ishii, J. L. & Metrick, A. (2003). Corporate governance and equity prices (pp. 107-155).
Gujarati, D. (2008). N, 2003, Basic Econometrics,“. International Edition, Mcgraw-Hill.
Hair, J. F. (2010). Multivariate data analysis.
Haniff, R. & Hudaib, M. (2006). Corporate governance structure and performance of Malaysian listed companies. Journal of Business Finance & Accounting, 33(7-8), 1034-1062. Wiley Online Library.
https://doi.org/10.1111/j.1468-5957.2006.00594.x
Hassn, O. & Marston, C. (2010). Disclosure measurement in the empirical accounting literature-a review article. Available at SSRN 1640598.
https://doi.org/10.2139/ssrn.1640598
Haxhi, I. & Aguilera, R. V. (2014). Corporate governance through codes. Wiley Encyclopedia of Management. Wiley Online Library.
Hermlin, B. E. & Weisbach, M. S. (2012). Information disclosure and corporate governance. J. Finance, 67(1), 195-233. Wiley Online Library.
https://doi.org/10.1111/j.1540-6261.2011.01710.x
Hidalgo, R. L., Garc’ia-Meca, E. & Mart’inez, I. (2011). Corporate governance and intellectual capital disclosure. Journal of Business Ethics, 100(3), 483-495. Springer.
https://doi.org/10.1007/s10551-010-0692-x
Hussainey, K. & Al-Najjar, B. (2012). Understanding the determinants of RiskMetrics/ISS ratings of the quality of UK companies’ corporate governance practice. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences de l’Administration, 29(4), 366-377. Wiley Online Library.
https://doi.org/10.1002/cjas.1227
Jallow, K., Ntim, C. G., Opong, K. K., Danbolt, J. & Thomas, D. A. (2012). Voluntary corporate governance disclosures by post-apartheid South African corporations. Journal of Applied Accounting Research, 13(2), 122-144. Emerald Group Publishing Limited.
https://doi.org/10.1108/09675421211254830
Jeensen, M. C. & Meckling, W. H. (1979). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Springer.
https://doi.org/10.1007/978-94-009-9257-3_8
Johanson, D. & Ostergren, K. (2010). The movement toward independent directors on boards: A comparative analysis of Sweden and the UK. Corporate Governance: An International Review, 18(6), 527-539. Wiley Online Library.
https://doi.org/10.1111/j.1467-8683.2010.00813.x
Judge, W. (2011). The multiple levels of analysis involved with corporate governance studies. Corporate Governance: An International Review, 19(1), 1-2. Wiley Online Library.
https://doi.org/10.1111/j.1467-8683.2010.00835.x
Kang, T. & Yoo, Y. K. (2012). Governance role of auditors and legal environment: Evidence from corporate disclosure transparency. European Accounting Review, 21(1), 29-50. Taylor & Francis.
https://doi.org/10.1080/09638180.2011.599928
Krenn, M. (2014). Decoupling as a sustainable firm response to pressures for convergence and divergence in corporate governance: The case of codes of good corporate governance. Journal of Management Policy and Practice, 15(4), 103. North American Business Press.
Ntim, C. G., Opong, K. K. & Danbolt, J. (2012). The relative value relevance of shareholder versus stakeholder corporate governance disclosure policy reforms in South Africa. Corporate Governance: An International Review, 20(1), 84-105. Wiley Online Library.
https://doi.org/10.1111/j.1467-8683.2011.00891.x
Perez de Toledo, E. (2010). The relationship between corporate governance and firm value: A simultaneous equations approach for analyzing the case of Spain. CAAA Annual Conference.
https://doi.org/10.2139/ssrn.1535073
Pietrancosta, A. (2009). Enforcement of Corporate Governance Codes. A Legal perspective. Tilburg: Tilburg Univ. Press.
Salterio, S. E., Conrod, J. E. & Schmidt, R. N. (2013). Canadian evidence of adherence to “comply or explain” corporate governance codes: An international comparison. Accounting Perspectives, 12(1), 23-51. Wiley Online Library.
https://doi.org/10.1111/1911-3838.12006
Samaaha, K., Dahawy, K., Hussainey, K. & Stapleton, P. (2012). The extent of corporate governance disclosure and its determinants in a developing market: The case of Egypt. Advances in Accounting, 28(1), 168-178. Elsevier.
https://doi.org/10.1016/j.adiac.2011.12.001
Samaha, K., Khlif, H. & Hussainey, K. (2015). The impact of board and audit committee characteristics on voluntary disclosure: a meta-analysis. Journal of International Accounting, Auditing and Taxation, 24, 13-28. Elsevier.
https://doi.org/10.1016/j.intaccaudtax.2014.11.001
Sanchez-Marin, G., & Baixauli, J. S. (2014). CEO reputation and top management team compensation: The moderating role of corporate governance. Management Decision, 52(3), 7.
http://dx.doi.org/10.1108/MD-09-2013-0453
Schiehll, E., Terra, P. R. S. & Victor, F. G. (2013). Determinants of voluntary executive stock option disclosure in Brazil. Journal of Management & Governance, 17(2), 331-361. Springer.
https://doi.org/10.1007/s10997-011-9179-0
Solomon, J. (2007). Corporate governance and accountability. John Wiley & Sons.
Tariq, Y. B. & Abbas, Z. (2013). Compliance and multidimensional firm performance: Evaluating the efficacy of rule-based Code of corporate governance. Economic Modelling, 35, 565-575. Elsevier.
https://doi.org/10.1016/j.econmod.2013.08.015
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Published
2017-08-23
How to Cite
Awwad Almanasir, A. H., & Shivaraj, B. (2017). Voluntary Corporate Governance Disclosure Innovative Evidence: The Case of Jordan. Journal of Reviews on Global Economics, 6, 443–454. https://doi.org/10.6000/1929-7092.2017.06.45
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