THE INFLUENCE OF ROYAL BOARD OF DIRECTORS AND OTHER BOARD CHARACTERISTICS ON CORPORATE RISK DISCLOSURE PRACTICES

Download This Article

Abstract

This study focuses on Saudi’s unique social and cultural context and its impact on board attributes and corporate risk disclosure (CRD) by addressing the relationship between royal family members on the board and CRD. Using content analysis of a sample of 307 company-year observations over the period of 2008-2011, the results from the descriptive statistics show a moderate level of CRD practices among firms. The initial and additional results from the panel data analysis show that board characteristics, namely, board size, board independence, royal family members on the board, and meeting frequency of the board of directors are important determinants of CRD in Saudi Arabia. The positive influence of royal family members on CRD in this study contradicts the classic negative relationship between family members on the board and disclosure, which indicates that not all types of families’ members on the board have the same motivation towards corporate disclosure.

Keywords: Corporate Risk Disclosure, Board Characteristics, Annual Reports, Saudi Arabia

JEL Classification: G32, M14, M48

Date received: 28 November 2016

Date accepted: 4 February 2017

How to cite this paper: Habtoor, O., & Ahmad, N. (2017). The influence of royal board of directors and other board characteristics on corporate risk disclosure practices. Corporate Ownership & Control, 14(2-2), 326-337. https://doi.org/10.22495/cocv14i2c2p6