The impact of corporate disclosure and website informativeness on enhancing corporate governance and performance

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Abstract

This study aims to investigate how transparency affects the company’s performance. Transparency in corporate governance is crucial to prevent misconduct, encourage accountability, and integrity, and ultimately, enhance sustainable performance in businesses. In contrast, inadequate disclosure of information can lead to business scandals and fraud, diminishing trust in institutions, harming stakeholders, and adversely affecting the entire economy (Salin et al., 2019). The study measures transparency through firm disclosure policy and website informativeness. This study employs archival analysis of the annual reports of the top 500 publicly listed firms in Malaysia based on market capitalization. Nine items were created to assess the independent variables, while the dependent variable was business performance, represented by return on equity (ROE), return on assets (ROA), Tobin’s Q, and market-to-book ratio (MTB). This study concludes that there is no substantial association between the company’s disclosure policy and website informativeness and corporate performance, leading to the rejection of both hypotheses. In the age of digital transformation and artificial intelligence, companies have various alternative methods to disseminate information besides annual reports and websites.

Keywords: Corporate Governance, Transparency, Corporate Disclosure, Information Technology, Information Asymmetry, Financial Reporting

Authors’ individual contribution: Conceptualization — A.S.A.P.S. and Z.I.; Methodology — A.S.A.P.S., Z.I., and M.S.; Formal Analysis — A.S.A.P.S., Z.I., and M.S.; Investigation — A.S.A.P.S.; Data Curation — A.S.A.P.S.; Writing — Original Draft — A.S.A.P.S.; Writing — Review & Editing — Z.I. and M.S.; Visualization — A.S.A.P.S. and Z.I.; Supervision — Z.I. and M.S.; Project Administration — A.S.A.P.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, M12, M14, M40, M48

Received: 10.03.2024
Accepted: 13.12.2024
Published online: 18.12.2024

How to cite this paper: Salin, A. S. A. P., Ismail, Z., & Smith, M. (2024). The impact of corporate disclosure and website informativeness on enhancing corporate governance and performance [Special issue]. Journal of Governance & Regulation, 13(4), 306–315. https://doi.org/10.22495/jgrv13i4siart9