Future-oriented disclosure and corporate value: the role of an emerging economy corporate governance

Abstract

PurposeKuwait has taken significant steps to reform its corporate governance (CG) by introducing the New Company Law (NCL) in 2013. This study investigates how this reform of CG mechanisms affects the disclosure of future-oriented information. Likewise, it explores how CG mechanisms affect the informativeness of this disclosure.Design/methodology/approachThe sample comprises the nonfinancial firms listed on the Boursa Kuwait from 2014 to 2018. The study uses an automated textual analysis to measure the level of future-oriented disclosure in the annual reports of these firms. The informativeness of disclosure is proxied by firm value at three months of the date of the annual report.FindingsThe study finds that Kuwaiti firms with larger board sizes and substantial ownership by institutional investors are less likely to disseminate future-oriented information. Conversely, firms with more independent directors and larger audit committees are more inclined to provide future-oriented disclosure. Furthermore, the disclosure of future-oriented information carries contents that enhance investors' valuations of Kuwaiti firms, especially in firms with fewer institutional ownership and more prominent audit committees.Research limitations/implicationsIt focuses on management decisions to disclose information in the annual reports. Examining other channels of disseminating information, such as social media disclosure, provides avenues for future research.Practical implicationsPolicy setters in Kuwait should consider the importance of some CG mechanisms to improve the transparency of Kuwaiti firms, as suggested by the NCL. Likewise, investors should rely on such specific CG mechanisms to build their prospects about the firm's value.Originality/valueApart from developed countries, the current study is the first evidence on how CG mechanisms could affect the informativeness of future-oriented disclosure in a developing economy. It is also the first to investigate the new CG mechanism introduced by Kuwait NCL in 2013.

Bibliometric network analysis of thirty years of islamic banking and finance scholarly research

“…Finally, based on our keyword network analyses, future research can employ methodological advancements such as structural equation modelling and the generalized method of moments (GMM) model. Besides, future research can explore several research aspects of Islamic institutions which are ignored in IB&F research, including Islamic banks’ level of cash holdings (Hassanein and Kokel 2022 ), voluntary disclosure (Alm El-Din et al 2022 ), social responsibility (Alazzani et al 2017 ), market reaction (Hassanein et al 2021 ), earning management (Zalata et al 2019 ), and future-oriented information (Hassanein and Hussainey 2015 ; Hassanein et al 2019 ; Benameur et al 2022 ).…”

Sustainability reporting scholarly research: a bibliometric review and a future research agenda

“…Scholarly research investigates how corporate governance promotes SR. Corporate governance ensures that corporate managers act in stakeholders’ best interests and enhance firm transparency (Hassanein, 2022 ; Alm El-Din et al 2022 ; Benameur et al 2022 ; Hassanein and Kokel 2022 ; Hassanein and Elsayed 2021 ; Hassanein et al 2021 ; Alazzani et al 2017 ). Research has examined the relationship between SR and various corporate governance attributes, including board of directors (Furlotti et al 2019 ; Ong and Djajadikerta 2020 ; Maroun and Prinsloo 2020 ), gender diversity (Cucari et al 2018 ; Furlotti et al 2019 ; Ong and Djajadikerta 2020 ) and ownership structure (Amidjaya et al, 2020).…”

“…Research has examined the relationship between SR and various corporate governance attributes, including board of directors (Furlotti et al 2019 ; Ong and Djajadikerta 2020 ; Maroun and Prinsloo 2020 ), gender diversity (Cucari et al 2018 ; Furlotti et al 2019 ; Ong and Djajadikerta 2020 ) and ownership structure (Amidjaya et al, 2020). The independent board members control the opportunistic behavior of other board members and mitigate the information asymmetry issue (Benameur et al 2022 ). In support, Ong and Djajadikerta ( 2020 ) find that firms with more independent board members provide high SR.…”

Is voluntary risk disclosure informative? The role of UK firm-level governance

“…To check the results' robustness, we use another proxy for firm value: the ratio of a corporate market value of equity to its book value (hereafter, M-B). The M-B has been used in previous research to measure firm value (Hassanein and Elsayed, 2021; Benameur et al. , 2023).…”

“…In response, the firm-level governance (henceforward, FL_G) acts as a monitoring system that reduces information asymmetry and agency costs by increasing corporate disclosure and transparency (Benameur et al. , 2023).…”