The Relationship Between Voluntary Disclosure And Board Of Directors Characteristics In The Presence Of A Dominant Shareholder

In order to improve communication with investors and other shareholders, to deliver security market information of corporate valuation and prospects in the future, listed companies conduct disclosures voluntarily in addition to mandatory requirement of information disclosure. Voluntary disclosure can reduce information asymmetry during issuing securities, reduce transaction costs, avoid"adverse selection"of investors and suppress"moral hazard"and opportunism of the company managements. Because of these, people pay more and more attention on voluntary disclosures. Up to now, the research on the relationship between voluntary disclosure decisions and corporate governance mainly came from developed countries and areas. In China, some exploratory studies have been made, but still need to be expanded and deepened further. Because of the affection of unique economy environment, economy development and social traditional culture, listed Chinese companies'corporate governance has some unique feature, so many foreign research results on voluntary disclosure are not fit for listed Chinese companies effectively. There're usually dominant shareholders in Chinese listed companies. So, in order to better understand Chinese listed companies, we must consider the presence of a dominant shareholder. Then, this paper empirically examines the linkages between the board of directors and the extent of voluntary disclosure in annual reporting provided by listed Chinese companies.In this paper, the board of directors is characterized by five attributes, which are the proportion of large shareholders'directors, the proportion of independent directors, board size, the establishment of audit committee and duty of board leadership. In addition, firm size, financial leverage, operating performance and foreign fund are chosen as the control variables. This study is based on a sample of 231 industrial 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 voluntary disclosure and board of directors characteristics. Based on the empirical evidences, this paper provides some advices about perfecting the board of directors, promoting the development of voluntary disclosure, improving the professional diathesis of investors and expanding the institutional investors for the development of voluntary disclosure.