Influence of board characteristics on risk disclosure quality in China's growth enterprise market companies

Huang, Yanyu (2017) Influence of board characteristics on risk disclosure quality in China's growth enterprise market companies. [Dissertation (University of Nottingham only)]

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Risk disclosure has become a popular research topic in the field of theory and practice. However, there are few empirical studies on the risk disclosure of Chinese listed companies. Factors influencing Chinese companies’ risk disclosure quality have not been sufficiently researched and verified. So, building upon previous studies, the present study explores the relation between board characteristics and the quality of risk disclosure in China.

In this dissertation, 76 information technology enterprises listed on the Chinese growth enterprises market (GEM) are used as samples in order to analyse how board characteristics impact the quality of risk disclosure from 2014 to 2016. By establishing four multivariate regression models, this dissertation empirically demonstrates that a positive association exists between a company’s board size and risk disclosure quality. In addition, as proposed by the agency theory, information asymmetry increases when a chief executive officer (CEO) is also chairman, which results in a low risk disclosure quality. However, this study fails to demonstrate a significant association between board independence and risk disclosure level, risk strategies disclosed as well as overall risk disclosure quality. An increased percentage of independent non-executive directors (NEDs) on a board only increases the coverage of risk disclosure. These results indicate that the supervisory role of independent NEDs in Chinese enterprises has not been fully utilized. The above findings are still valid after the robustness test and therefore, have practical economic consequences and value.

As to the present research practice in China, the influence of independent NEDs on risk disclosure level and quality are to be improved. International research trends of risk disclosure require companies to improve the transparency of risk information and the supervising role of a companies’ board. Although it is difficult to form a unified standard for risk disclosure and corporate governance due to the differences in practice among countries, maintaining the appropriate level of risk disclosure quality should be an international consensus. This should also be one of the basic requirements of China's risk disclosure specification. It is hoped that the current study can provide empirical support in enhancing the transparency of risk disclosure by improving the effectiveness of a company’s board in China.

Item Type: Dissertation (University of Nottingham only)
Keywords: Risk Disclosure Quality, Board Characteristics, Agency Problems, Manual Content Analysis
Depositing User: Huang, Yanyu
Date Deposited: 09 Apr 2018 14:54
Last Modified: 10 Apr 2018 15:00

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