A third dimension to understanding voluntary disclosures

Abstract

PurposeThe purpose of this paper is to establish sufficient potential for a novel perspective that could enhance understanding of the rationale behind voluntary disclosures. In this paper, the authors seek to provide an integrated view from different disciplines that points to a new dimension. This dimension is expected to promote a better understanding of voluntary disclosures in corporate governance.Design/methodology/approachThe authors use the conceptual underpinnings of agency theory and integrate several perspectives from different disciplines. Through the support of simple matrices and a conceptual figure, an interesting finding is proposed that could help provide a new way of looking at voluntary disclosures.FindingsThe established view holds that due to information asymmetry between the shareholders and the management, voluntary disclosures are more meaningful for the shareholders of the firm. The authors, however, suggest that since information asymmetry is already embedded in several roles and strategic actions of the board, it leads to the development of a third dimension in understanding voluntary disclosures.Originality/valueInformation asymmetry has been well understood as one of the key aspects of the agency theory. The authors' strive to apply this phenomenon while looking at the roles of the board and the strategic actions that result therein. The result is an enhanced understanding of the motivations behind voluntary disclosures.

Voluntary cybersecurity disclosure in the banking industry of Bangladesh: does board composition matter?

“…An effective board composition minimises information asymmetry between management and investors by providing adequate and Voluntary cybersecurity disclosure relevant voluntary disclosures. Prince and Dwivedi (2013) mention that voluntary disclosures are critical to alleviating the problems of information asymmetry and agency conflicts. On the other hand, according to resource-based theory, a board of directors represents a valuable base of intangible resources to the management and firms in terms of value-creation characteristics like diverse views, awareness, skills, professional experience and leadership qualities, which enable the company to generate a new idea or adopt contemporary practices (Hillman and Dalziel, 2003;Pfeffer and Salancik, 2003;Tejedo-Romero et al, 2017).…”

Information Disclosure and its Determinants on Lithuanian Companies Websites: Quantitative Approach

“…According to Prince and Dwivedi (2013), studies of the information disclosure influence on company's results, provided final, reasoned conclusions, and to date there is no consensus reached about the factors determining a voluntary disclosure. Table 1 presents determinants which influence voluntary information disclosure that were most frequently analysed in previous scientific literature on voluntary information disclosure.…”

Global Top E-Commerce Companies: Transparency Analysis Based on Annual Reports

“…A number of previous studies have been conducted related to the quality of financial statement disclosures (Chiu and Wang 2015;Scaltrito 2015;Easley 2010;Valaskova et al 2021). Studies of the information disclosure influence on company results provided final, reasoned conclusions, and to date, there has been no consensus reached about the factors determining a voluntary disclosure (Prince and Dwivedi 2013).…”