Impact of Corporate Governance Mechanisms on Disclosure Practices: Evidence from JSE-listed Financial Institutions

Purpose: The effect of corporate disclosure practices on corporate governance mechanisms among the Johannesburg Stock Exchange (JSE)-listed financial institutions in South Africa is assessed in this study. An understanding of governance-disclosure linkages is critical in the current climate of threats to the legitimacy of the markets. However, minimal research has explored South African financial companies with respect to prevailing governance aspects. This study fills this gap by examining the relationships between the key internal mechanisms and disclosure for 122 JSE listed financial firms during the period 2012-2020. Design/Methodology/Approach: The research design in this paper is non-experimental correlational research design with panel data and regression analysis. The approach is appropriate for the purpose of examining the relationships between corporate governance mechanisms (independent variables) and disclosure practices (dependent variable) among the financial institutions of the target population (the JSE listed financial institutions). Findings: Panel regression results show that larger and gender-diverse boards are significantly related to a wider scope of disclosure as reported by a dichotomous scope disclosure index. Implications/Originality/Value: The findings suggest that there are real and substantive opportunities to enhance disclosure and demonstrate accountability through the use of expandable boards and female directors.