Voluntary Corporate Governance Disclosure by Post-Apartheid South African Corporations

Collins G. Ntim, Kwaku K. Opong, Jo Danbolt, D A Thomas

Research output: Contribution to journalArticlepeer-review

Abstract

Abstract

Purpose – The purpose of this paper is to investigate 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 – The paper constructs 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. The authors also conduct regression analysis to identify the main drivers of voluntary CG disclosure.

Findings – The 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. The authors 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 – These 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. This 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

Paper type Research paper
Original languageEnglish
Pages (from-to)122-144
Number of pages23
JournalJournal of Applied Accounting Research
Volume13
Issue number2
DOIs
Publication statusPublished - 2012

Keywords

  • Voluntary disclosure
  • Corporate governance
  • Affirmative action
  • King Report
  • South Africa

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