IMPACT OF CORPORATE GOVERNANCE ON VOLUNTARY INFORMATION DISCLOSURE
ABSTRACT
This study focused on examining the relationship between corporate governance and voluntary information disclosure in Nigeria.  The main objective of this study is to investigate the impact of corporate governance on firm’s voluntary information disclosure specifically examining some corporate governance mechanisms with voluntary information disclosure.
The study made use of annual report and account of companies quoted on the Nigerian stock exchange. Data was collected for six years data ranging from 2010 to 2015 of which both descriptive, correlation and multiple panel linear regression analysis data analysis method was used to examine the variables.
 The regression results show that board size impact negatively on voluntary disclosure; whereas board meeting exhibits a negative relationship with voluntary information disclosure. Board independence was found to impact negatively on voluntary information disclosure. While audit firm size was found to impact positively on voluntary information disclosure. The study recommends a larger board size and audit firm size as well as adequate board meetings and presence of non-executives in the board in order to improve voluntary information disclosure
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1. Background of Study    -    -    -    -    -    -    -    
1.2. Statement of Research Problem    -    -    -    -    -    -    
1.3. Objectives of the Study    -    -    -    -    -    -    -    
1.4. Research Hypotheses    -    -    -    -    -    -    -    
1.5. Scope of Study    -    -    -    -    -    -    -    -    
1.6. Significance of the Study    -    -    -    -    -    -    -    
1.7. Limitation of the Study    -    -    -    -    -    -    -
CHAPTER TWO: LITERATURE REVIEW
2.1. Introduction    -    -    -    -    -    -    -    -    
2.2. Voluntary Information Disclosure    -    -    -    -    -    
2.3. Review of Relevant Literature    -    -    -    -    -    -    
2.3.1 Voluntary Information Disclosure and Board Meetings    -    -    
2.3.2. Voluntary Information Disclosure and Board Independence    -    -    
2.3.3. Voluntary Information Disclosure and Board Size    -    -    
2.3.4. Voluntary Information Disclosure and Audit firm size    -    -    
2.4.     Review of Theories    -    -    -    -    -    -    -    
2.4.1.    Agency Theory    -    -    -    -    -    -    -    
2.4.2.    Stakeholder Theory    -    -    -    -    -    -    -    
2.4.3.    Legitimacy Theory    -    -    -    -    -    -    -    
CHAPTER THREE: METHODOLOGY
3.1. Introduction    -    -    -    -    -    -    -    -    
3.2. Research Design    -    -    -    -    -    -    -    -    
3.3. Population and Sample    -    -    -    -    -    -    -    
3.4. Method of Data Analysis    -    -    -    -    -    -    -    
3.5. Model Specification    -    -    -    -    -    -    -    
3.6. Measurement of Variables    -    -    -    -    -    -    
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1. Introduction    -    -    -    -    -    -    -    -    
4.2. Result of regression diagnostics    -    -    -    -    -    -    
4.2.1. HausmanTest    -    -    -    -    -    -    -    -    
4.2.2. Test for Heteroskedasticity    -    -    -    -    -    -    
4.2.3. Test for Autocorrelation    -    -    -    -    -    -    
4.2.4. Descriptive statistics    -    -    -    -    -    -    -    
4.3. Analysis of regression Result and discussion of findings    -    -    
4.4. Test of Hypothesis    -    -    -    -    -    -    -    
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1. Introduction    -    -    -    -    -    -    -    -    
5.2. Summary of Findings    -    -    -    -    -    -    -    
5.3. Conclusion    -    -    -    -    -    -    -    -    
5.4. Recommendation for the study    -    -    -    -    -    -    
5.5. Recommendation for further studies    -    -    -    -    -    
 BIBILOGRAPHY    -    -    -    -    -    -    -    -    
APPENDICES I    -    -    -    -    -    -    -    -    
APPENDICES II    -    -    -    -    -    -    -    -    
APPENDICES III    -    -    -    -    -    -    -    -    
LIST OF TABLES
Table 3.1: Measurement of Variables    -    -    -    -    -    -    
Table 4.1: Hausman Test    -    -    -    -    -    -    -    
Table 4.2: Test of Heteroskedasticity    -    -    -    -    -    -    
Table 4.3: Test for Autocorrelation    -    -    -    -    -    -    
Table 4.4: Descriptive statistics    -    -    -    -    -    -    
Table 4.5: Analysis of regression and discussion of findings    -    -    -    
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF STUDY
Accounting is seen as the language of business which entails the medium of communication between the players of the business world. According to American Accounting Association (AAA), accounting is the process of identifying, measuring and communicating economic information to permit informed judgment and decision by users of the information. The communication as presented in the above definition is done via reporting and disclosures for the entity which is governed by the top management. Corporate governance and voluntary information disclosures has evolved over the years and has attracted attention from the government, academics, and practitioners. Disclosure entails to make public, to unveil, to unmask or to expose while voluntary refers to something that is not mandatory. The term disclosure refers to the whole array of different forms of information produced by firms, such as the annual report which includes the director’s statement, the operating and financial review, profit or loss account, the statement of financial position and statement of cash flow (Solomon, 2010). There are different forms of disclosure that exist. (Ali, Chen, Radhakrishnan,2007) identifies three forms of corporate disclosure to include mandatory and voluntary, financial and narrative, printed and internet disclosure. Improving Business Reporting: Insights into Enhancing Voluntary Disclosures issued by Financial Accounting Standards
Board (FASB) in 2001 has given a clear definition of voluntary disclosure as the provision of information by a company’s management beyond requirements such as generally accepted accounting principles and Securities and Exchange Commission rules. Voluntary disclosure is defined by (Meek,Roberts,Grey,1995: 555) as free choices on the part of company managements to provide accounting and other information deemed relevant to the decision needs of users of their annual reports. Moreover, voluntary disclosure may include disclosure recommended by an authoritative code or body (Hassan & Marston, 2010: 7).Thus, voluntary information disclosure entails information made public in excess of what is mandatory or required by the law. It also deals with extent and nature of information that is communicated by corporations in excess of what is required. The extent of information disclosure, its adequacy, relevance and reliability are important characteristics of financial prevalent in a country (Hossain, 1999). Among the different types of information disclosed in the annual reports, disclosure of voluntary financial accounting information is the focus of this study because disclosing financial information is necessary since investors mainly rely on the information disclosure in the annual report and more voluntary information will enhance transparency, reduce opportunistic behaviors and information asymmetry and management cannot hold the important information for their own benefit(Marleen,Heidi,Ann,Linda.,2005; Apostolos and Konstantinos, 2009). Corporate governance importance in business organizations cannot be over-emphasized. Corporate governance in its simplest form is the way an organization is directed and controlled. Rezaee (2009) defined corporate governance as a process through which shareholders induce management to act in their interest, providing a degree of confidence that is necessary for capital markets to function effectively.
La Porta,Lopez-De-Silano,Shleifer,Vishny,(2000) view corporate governance as a set of mechanisms through which outside investors protect themselves against expropriation by insiders, i.e. the managers and controlling shareholders. It has been contended that corporate governance practices is not a standard mode (not a one size fits all) and thus cannot operate in any standard form but rather vary across nations and firms (OECD, 2000) and thus this indicate that there is no acceptable or defined corporate governance form among organizations or nations This variety reflects distinct societal values, different ownership structures, business circumstances, and competitive conditions strength and enforceability of contracts. The political standing of the shareholders and debt holders, and the development as well as the enforcement capacity of the legal system is all crucial to effective corporate governance (Gregory & Simms, 1999).
One of the significant aspects of good corporate governance is linked to the disclosure of important information in the annual reports. According to Basel Committee on Banking Supervision (2005), Xue (2008) and Tian and Chen(2009), information disclosure is important as it is the heart of corporate governance. They further state that voluntary information disclosure is essential to signal the performance of the corporation, to reduce the information asymmetry, to clarify the conflict of interests between the shareholders and the management and to makecorporate-insiders accountable. It has been argued that managers should voluntarily disclose information that would satisfy the needs of various stakeholders (Meek et al., 1995). Voluntary disclosure is aimed at providing a clear view to stakeholders about the business’s long-term sustainability and reducing information asymmetry and agency conflicts between managers and investors (Healy & Palepu, 2001; Boesso & Kumar, 2007). However, Core (2001) and Einhorn and Ziv (2012) argued that voluntary disclosure will still remain a matter of biased information selected by managers. Theoretically, the overriding argument in some quarter is that the primary causes of poor and weak financial disclosure among firms have to do with the internal structures and characteristics of the firms (Karami and Akhgar, 2014).
In Nigeria, the failures of some organizations in respect of poor financial reporting and weak corporate governance such as Cadbury Nigeria plc and some Nigerian banks such as Standard bank have cast doubts on stakeholder’s confidence on information disclosed by corporate entities. This wide-ranging failure of corporate organizations resulting from insufficient disclosures has warranted the need for enhancement in financial information disclosures by setting up good corporate governance structures. Therefore, it is the intention of this study to focus on certain factors that relates to how an entity is being directed and controlled in order to identify the impact of corporate governance practices on voluntary information disclosures in the case of Nigerian companies listed in the Nigerian Stock Exchange (NSE).
1.2 STATEMENT OF RESEARCH PROBLEM
Voluntary information disclosure as the name implies is not mandatory, thus corporate organizations level of disclosure varies from organizations to organizations. Therefore, there could be comprehensive or partially voluntary disclosures by organizations. Many studies have shown that managers exercise discretion in deciding whether to disclose voluntarily or not (Deumes & Knechel 2008; Healy & Palepu 2001; Watson,Shrives,Marston,2002). Empirical evidence suggests that voluntary disclosure practices are adopted if benefits from disclosures exceed costs of non-disclosures. Costs include agency costs which require shareholders to appoint committees of directors and auditors to monitor managers’ behaviors and information asymmetry costs that are incurred by managers due to depreciation of firm value as well as higher cost of raising capital (Botosan 1997; Eng,Kowk,Yew,2001; Leuz & Wysocki 2008; Sengupta, 1998).
This study aims at examining the relationship between corporate governance system; board size board independence, board meeting and audit firm size and voluntary information disclosures in the financial sector in the Nigerian environment.
 The following research questions have been developed in order to discover the relationship between corporate governance and voluntary information disclosure;
 RESEARCH QUESTIONS    
1.    What is the relationship between board size and voluntary information disclosures?
2.    To what extent does board independence have an impact on voluntary information
disclosures?
3.    What is the relationship between board meetings and voluntary information disclosures?
4.    To what extent does audit firm size have an impact on voluntary information disclosures?
1.3 OBJECTIVES OF THE STUDY
The main objective of this study is to examine the relationship between corporate governance and voluntary information disclosure. The specific objectives therefore include;
1.    To determine the relationship between board size and voluntary information disclosure.
2.    To ascertain the relationship between board independence and voluntary information disclosure.
3.    To find out the relationship between board meetings and voluntary information disclosures.
4.    To examine the relationship between audit firm size and voluntary information disclosure.
1.4 RESEARCH HYPOTHESES
1.    There is no relationship between board size and voluntary information disclosure;
2.    There is no relationship between board independence and voluntary information disclosure;
3.    There is no relationship between board meetings and voluntary information disclosure; and
4.    There is no relationship between audit firm size and voluntary information disclosure.
1.5 SCOPE OF THE STUDY
This study examines the impact of corporate governance on voluntary information disclosures and in order to carry out this research, its study area will be restricted only to firms quoted in the first tier securities of Nigeria Stock Exchange (NSE).This study shall employ the use of the annual report of firms quoted on the floor of the Nigerian stock exchange for a period of six years ranging from 2010-2015.
1.6 SIGNIFICANCE OF THE STUDY  
This study will contribute to the existing literature by providing evidence on the impact of corporate governance on voluntary information disclosure.
This study will be significant to investors, researchers, regulatory bodies, governments, accountants, stockbrokers, financial analysts and scholars, as financial reporting is a useful tool for managers to communicate with outside parties. The major purpose of disclosure is to help users in capital-investing decisions, interpreting company’s financial status, evaluating management performance, and forecasting future cash flows. It is hoped that the evidence would serve as an important quantitative information which will add to the existing body of empirical literature from a developing stock exchange such as that of Nigeria.
1.7 LIMITATION OF THE STUDY
This research work as with any other research work is subject to some limitation. It focuses on companies listed on the Nigerian stock Exchange only and therefore does not represent companies listed on other stock exchange or unlisted companies. The study used only a few corporate governance mechanisms in other to analyze the voluntary information disclosure practice in Nigeria.