An Empirical Research Of Corporate Governance Features And Voluntary Disclosure

With the rapid development of accounting environment, accounting information develops more and more quickly. The growth of the financial security market brings the need for voluntary information disclosure into prominence. With the growth of economy, agency relationship becomes more and more complexity. Mandatory disclosure can not satisfy information users. Investors need more accounting information to make decisions. Mangers expect more accounting information to disclosure their outstanding achievement. Government also needs more accounting information to estimate the operation of companies. In order to satisfy the demands of different investors and other information users, we have to disclose more voluntary information.Nowadays, the main accounting information disclosure in our country is mandatory disclosure and the voluntary disclosure is complement. Foreign scholars have done lots of studies on voluntary disclosures, but internal scholars have done a little on those, especially on empirical research. Because of the affection of unique economy environment, economy development and traditional culture, Chinese listed companies' corporate governance has some unique feature, so many foreign research results on voluntary disclosures are not fit for listed Chinese companies effectively. This paper empirically examines how corporate governance features affect voluntary disclosures in annual report provided by listed Chinese companies.In this study, corporate governance is characterized by eight attributes, which are the proportion of independent directors to total number of directors on the board, CEO duality, the proportion of current A share, ownership concentration, the proportion of managerial ownership, the proportion of state-owned ownership, the proportion of state-owned corporation ownership, the audit of the big four CPA firms. Meanwhile, firm size, equity profitability and capital structure are chosen as the control variables. When designing the voluntary disclosure index system, the paper consult Board leadership, outside directors'expertise and voluntary corporate disclosures, written by Ferdinand A. Gul&Sidney Leung(2004). This study is based on a sample of 148 listed Chinese companies that only have A-shares on either Shanghai or Shenzhen Stock Exchange. Then, a linear multiple regression equation is established to test the association between the dependent variable of voluntary disclosure and the independent variables of corporate governance. The results indicate that the proportion of current A share and state-owned corporation ownership have significantly positive effect to the extent of voluntary disclosures and ownership concentration has a obviously negative effect to the extent of voluntary disclosures, while the coefficients for the other independent variables are insignificant. The descriptive statistics on the extent of voluntary disclosure discloses that the items of voluntary disclosure of annual reports are very few. Corporations mainly disclose mandatory accounting information and rarely disclose voluntary information. Most important, companies often disclose good news, such as the stratagem of the company and the future action and so on. But they disclose bad news very infrequently.Based on the empirical evidences, the paper provides some advices on improving listed Chinese companies' voluntary disclosures. In the end of this paper,the implications of the findings for policy and research are delineated.The difficulties of the study are designing the voluntary disclosure index system and collecting data of the dependent variable of voluntary disclosure and the independent variables of corporate governance. Because there aren't perfect voluntary disclosure index systems in our country, we have to use western countries'study for reference and modify it to adapt our circumstance. This process was tough and need a lot of time and energy. On the other hand, I have to read the annual report of all sample companies to collect the data and try my best to keep fair in this process.There are two innovations of this study. Fist, the study combined voluntary disclosure with corporate governance feature. By strengthening corporate governance, it is propitious to accelerate the development of voluntary disclosure. Second, the study chose sample enterprises which previously participated in the share innovation of China. Taking into the share innovation of China account, it may affect the corporate governance. But after the share innovation, the shares which have reformed will be allowed to circulate after two or three years. So it would not greatly affect the result of this study.