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Corporate Governance „Actors”’ Capability And Risk Information Transparency – Empirical Study On European Banking System

Listed author(s):
  • STEFANESCU Cristina Alexandrina

    (Babeş-Bolyai University, Cluj-Napoca, Romania)

Registered author(s):

    The purpose of our empirical study is to assess the relationship between corporate governance „actors”’ capability and risk information transparency in European banking system. The research methodology used for achieving our goal is based on correlation tests and regression analyses for identifying and assessing the relationships between the “risk information disclosure index” developed and the experience and education of both board of directors and audit committees’ members. The results of the performed analysis reveal significant positive influences of governance actors’ capability on the level of risk information disclosure, thus confirming our assumptions that the higher the educational degrees and professional expertise, the higher the level of disclosure. Irrespective of prior studies, which were focused on various corporate governance features, our paper comes to add value to research literature by testing the same characteristic, namely “capability” from two of the most important actors’ perspective: board of directors and audit committee. Moreover, we also had the chance to enrich the literature with this empirical study not only by focusing on a specific field - the banking one, which was little explored on this topic before, but also by considering a particular area of disclosure – the risk information one, thus revealing how corporate governance actors’ capability affected financial institutions’ transparency in case of E.U. banking system.

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    File URL: http://eccsf.ulbsibiu.ro/RePEc/blg/journl/9211stefanescu.pdf
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    Article provided by Lucian Blaga University of Sibiu, Faculty of Economic Sciences in its journal Studies in Business and Economics.

    Volume (Year): 9 (2014)
    Issue (Month): 2 (August)
    Pages: 98-107

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    Handle: RePEc:blg:journl:v:9:y:2014:i:2:p:98-107
    Contact details of provider: Postal:
    Lucian Blaga University of Sibiu, Faculty of Economic Sciences Dumbravii Avenue, No 17, postal code 550324, Sibiu, Romania

    Phone: 004 0269 210375
    Fax: 004 0269 210375
    Web page: http://economice.ulbsibiu.ro/
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    1. M. Akhtaruddin, 2010. "Board ownership, audit committees’ effectiveness, and corporate voluntary disclosures," Asian Review of Accounting, Emerald Group Publishing, vol. 18(3), pages 245-259, September.
    2. Ursel Baumann & Erlend Nier, 2004. "Disclosure, volatility, and transparency: and empirical investigation into the value of bank disclosure," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 31-45.
    3. Chung, Richard & Firth, Michael & Kim, Jeong-Bon, 2002. "Institutional monitoring and opportunistic earnings management," Journal of Corporate Finance, Elsevier, vol. 8(1), pages 29-48, January.
    4. Sunil Poshakwale & John K. Courtis, 2005. "Disclosure level and cost of equity capital: evidence from the banking industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(7), pages 431-444.
    5. Gavin J. Nicholson & Geoffrey C. Kiel, 2004. "A Framework for Diagnosing Board Effectiveness," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(4), pages 442-460, October.
    6. Godfred A. Bokpin, 2009. "Corporate governance, disclosure and foreign share ownership on the Ghana Stock Exchange," Managerial Auditing Journal, Emerald Group Publishing, vol. 24(7), pages 688-703, July.
    7. Yuliang Wu & Michael Bowe, 2010. "Information Disclosure, Market Discipline and the Management of Bank Capital: Evidence from the Chinese Financial Sector," Journal of Financial Services Research, Springer;Western Finance Association, vol. 38(2), pages 159-186, December.
    8. Dulacha G. Barako & Phil Hancock & H. Y. Izan, 2006. "Factors Influencing Voluntary Corporate Disclosure by Kenyan Companies," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(2), pages 107-125, 03.
    9. Philip M. Linsley & Philip J. Shrives, 2005. "Transparency and the disclosure of risk information in the banking sector," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 13(3), pages 205-214, July.
    10. Jordan, John S. & Peek, Joe & Rosengren, Eric S., 2000. "The Market Reaction to the Disclosure of Supervisory Actions: Implications for Bank Transparency," Journal of Financial Intermediation, Elsevier, vol. 9(3), pages 298-319, July.
    11. R.M. Haniffa & T. E. Cooke, 2002. "Culture, Corporate Governance and Disclosure in Malaysian Corporations," Abacus, Accounting Foundation, University of Sydney, vol. 38(3), pages 317-349.
    12. Nier, Erlend & Baumann, Ursel, 2006. "Market discipline, disclosure and moral hazard in banking," Journal of Financial Intermediation, Elsevier, vol. 15(3), pages 332-361, July.
    13. M. Akhtaruddin, 2010. "Board ownership, audit committees' effectiveness and corporate voluntary disclosures," Asian Review of Accounting, Emerald Group Publishing, vol. 18(1), pages 68-82, May.
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