Board Effect and the Moderating Role of CEO/CFO on Corporate Governance Disclosure: Evidence from East Africa.

Date

2023-02-21

Advisors

Journal Title

Journal ISSN

ISSN

2213-3933

Volume Title

Publisher

World Scientific

Type

Article

Peer reviewed

Yes

Abstract

This study examines the effects of board size, board independence, and the interaction effect between board independence and CEO/CFO on corporate governance disclosure practices. Using a large and hand-collected dataset comprising 1,000 firm-year observations from 2007 to 2017 in East Africa, this study develops a corporate governance disclosure index (CGDI) of East Africa consisting of 164 provisions. Adopting study three analytical approaches, namely OLS and fixed effect (FE) regressions and the two-stage system GMM, this study finds that large boards and independent directors are associated with greater disclosure of CG information. Different from environments with stronger institutions and corporate governance systems, our analysis suggests that the CEO/CFO power negatively moderates the link between board independence and corporate governance disclosure. Thus, firms whose CEO and CFO are involved in remuneration or nomination committees disclose less CG information. The combined effect of CEO and CFO on selection and remuneration committees and independent board in reducing corporate disclosure appears more pronounced for the post-financial crisis period compared to the crisis period. Our results remain the same after controlling for endogeneity concerns.

Description

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.

Keywords

Corporate governance disclosure, Board independence, Board size, CEO/CFO effect, East Africa

Citation

Fulgence, S., Boateng, A., Wang, Y. and Kwabi, F. (2022) Board Effect and the Moderating Role of CEO/CFO on Corporate Governance Disclosure: Evidence from East Africa. The International Journal of Accounting, 58 (3), 2350008

Rights

Research Institute

Finance and Banking Research Group (FiBRe)