Corporate governance and voluntary disclosure: evidence from Jordan

The main objectives of this study are to measure the voluntary disclosure level in the annual reports of Jordanian companies listed on Amman Stock Exchange (ASE) and to examine the relationship between a number of corporate governance attributes and the level of voluntary disclosure. Unweighted disclosure index consisting of 54 voluntary items was developed to assess the level of voluntary disclosure in the annual reports of 111 listed companies on ASE for the year 2012. Univariate and Multivariate analysis were applied to explore the relationship between each explanatory variables and the level of voluntary disclosure and a number of sensitivity tests were taken to further analysis. The findings of the study reveal that the level of voluntary disclosure in Jordanian corporate annual reports is low (its average is 32.4% for the year 2012). Univariate and multivariate analysis reveals that board size and audit committee size have a significant positive relationship with the level of voluntary disclosure while independent directors and ownership structure have a significant negative relationship with the level of voluntary disclosure. The findings of this study have important implications for authority regulators, policy makers, shareholders and other users of reports who have an interest in best practices of corporate governance.