SELECTED BOARD ATTRIBUTES AND RISK DISCLOSURE OF QUOTED INDUSTRIAL GOODS COMPANIES IN NIGERIA

Abstract

Past accounting scandals, the 2007/2008 global financial crisis and the recent collapse of giant companies across the globe have triggered the need for vibrant risk management and high-quality risk reporting through sound corporate governance. Corporate governance codes have recognized the need to improve corporate risk disclosure and provide guidance for such disclosures.

Understanding the drivers for firms to disclose risk-related information may assist regulators and standards setters in promoting both the spread and the improvement of such disclosures through the issuance of corporate governance codes and reporting. This study responds to recent calls for more research on this subject by empirically examining the effect of board attributes on risk disclosure of quoted industrial goods firms listed on the Nigerian Stock Exchange. This study adopts an Ex post facto research design. The population of the study comprised all the 13 listed industrial goods firms. Data were extracted from the published financial statements of the industrial goods companies, covering a period of ten (10) years from 2011 to 2020. Risk disclosure was measured using Dichotomous “1” if a company discloses risk in the financial statement “0” otherwise. The study employs logistics regression as the technique of analysis with the aid of STATA version 16 as a tool for analysis. The results indicate that board independence, board size and board gender diversity all have significant effects on the extent of risk disclosure in industrial goods companies in Nigeria. The study concluded the composition is a viable corporate mechanism for improved voluntary disclosure such as risk disclosure in industrial goods companies. this study recommends that the Nigerian industrial goods sector compose boards with diversities such as gender, expertise, and nationality especially the independent directors who can bring their experiences to bear in making decisions concerning risk information disclosures.