Study on the effect of corporate governance mechanisms on the discretionary disclosures of Indian firms

Abstract

This research is a study on the effect of corporate governance mechanisms on the discretionary disclosures of Indian firms The study specifically examines the effect of internal corporate governance mechanisms such as the board characteristics board functioning ownership structure and audit committee characteristics on the extent of discretionary disclosures of a firm Unlike many studies that focus on the effect of a unitary corporate governance mechanism this study examines the impact of several corporate governance mechanisms in a single model and provides a framework to assess the impact on the extent of discretionary disclosures made by a firm The study examined the discretionary disclosure practices of firms listed in the Bombay Stock Exchange over a five year period 2006 2010 Valid and reliable measures and indicators of discretionary disclosure and corporate governance mechanisms were chosen based on a comprehensive review of literature Discretionary disclosure was measured using a self constructed index comprising of 110 disclosure items