Corporate Boards, Shareholding Structures and Voluntary Disclosure in Emerging MENA Economies

Purpose: This paper investigates the level of voluntary compliance with, and disclosure of, corporate governance best practices, and the extent to which board characteristics and shareholding structures can explain discernible differences in the level of voluntary corporate governance disclosure in a number of emerging Middle Eastern and North African (MENA) economies. Design/methodology/approach: The paper uses a number of multivariate regression methods, namely ordinary least squares, weighted, non-linear, lagged-effects, two stage least squares and fixed-effects regression techniques to analyse data collected for a sample of listed corporations in emerging MENA economies from 2009 to 2014. Findings: First, in general, MENA listed firms have a relatively lower level of voluntary compliance with, and disclosure of, corporate governance practices compared to listed firms in developed countries. Second, our evidence suggests that corporate board characteristics, including board diversity and audit firm size have a positive association with the level of voluntary corporate governance disclosure. In contrast, the findings indicate that unitary board leadership structure, director shareholdings, and government shareholdings impact negatively on the level of voluntary corporate governance disclosure. The study does not, however, find any evidence to suggest that board size and family shareholdings have any significant relationship with the level of voluntary corporate governance disclosure. The findings are generally robust to alternative measures and potential endogeneity problems. Originality/value: This is one of the first empirical efforts at investigating the association between corporate governance mechanisms and voluntary disclosure in emerging MENA economies that observably relies on a multi-theoretical framework within a longitudinal cross-country research setting