Voluntary Corporate Governance Disclosures by Post-Apartheid South African Corporations

Journal of Applied Accounting Research, April 2012

Posted: 18 Dec 2011

See all articles by Collins G. Ntim

Collins G. Ntim

University of Southampton Business School, UK; University of Southampton

Kwaku K. Opong

University of Glasgow - Adam Smith Business School

Jo Danbolt

University of Edinburgh Business School

Dennis A. Thomas

Aberystwyth University

Date Written: December 18, 2011

Abstract

Purpose – This paper investigates as to whether post-Apartheid South African (SA) listed corporations voluntarily comply with and disclose recommended good corporate governance (CG) practices and, if so, the major factors that influence such voluntary CG disclosure behaviour.

Design/methodology/approach – We construct a broad voluntary CG disclosure index containing 50 CG provisions from the 2002 King Report using a sample of 169 SA listed corporations from 2002 to 2006. We also conduct regression analysis to identify the main drivers of voluntary CG disclosure.

Findings – Our results suggest that while compliance with, and disclosure of, good CG practices varies substantially among the sampled companies, CG standards have generally improved over the five-year period examined. We also find that block ownership is negatively associated with voluntary CG disclosure, while board size, audit firm size, cross-listing, the presence of a CG committee, government ownership and institutional ownership are positively related to voluntary CG disclosure.

Practical implications – Our findings have important implications for policy-makers and regulators. Evidence of improving CG standards implies that efforts by various stakeholders at improving CG standards in SA companies have had some positive impact on CG practices of SA firms. However, the substantial variation in the levels of compliance implies that enforcement may need to be strengthened further.

Originality/value – There is a dearth of evidence on the level of compliance with the King Report. Our study fills this gap by providing evidence for the first time on the level of compliance achieved, as well as contributing generally to the literature on compliance with codes of good governance and voluntary disclosure.

Keywords: Voluntary disclosure, Corporate governance, Affirmative action, King Report, South Africa

JEL Classification: G12, G34, G38

Suggested Citation

Ntim, Collins G. and Opong, Kwaku K. and Danbolt, Jo and Thomas, Dennis A., Voluntary Corporate Governance Disclosures by Post-Apartheid South African Corporations (December 18, 2011). Journal of Applied Accounting Research, April 2012, Available at SSRN: https://ssrn.com/abstract=1974131

Collins G. Ntim (Contact Author)

University of Southampton Business School, UK ( email )

Southampton Business School
Highfield
Southampton, England SO17 IBJ
United Kingdom
+44 (0) 238059 4285 (Phone)
+44 (0) 238059 3844 (Fax)

HOME PAGE: http://www.southampton.ac.uk/business-school/about/staff/cgn1n11.page

University of Southampton ( email )

Southampton, SO17 1BJ
United Kingdom

Kwaku K. Opong

University of Glasgow - Adam Smith Business School ( email )

University Avenue
Gilbert Scott Building
Glasgow, Scotland G12 8QQ
United Kingdom

Jo Danbolt

University of Edinburgh Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
UNITED KINGDOM

Dennis A. Thomas

Aberystwyth University ( email )

Aberystwyth, SY23 3DD
United Kingdom

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