Role of Media and Independent Directors in Corporate Transparency and Disclosure: Evidence from an Emerging Economy

Posted: 25 Sep 2017

See all articles by Rashid Zaman

Rashid Zaman

Lincoln University New Zealand ; Department of AgrBusiness & Commerce

Jamal Roudaki

Lincoln University (NZ)

Muhammad Nadeem

University of Queensland

Date Written: May 1, 2017

Abstract

Purpose: The purpose of this paper is to examine the impact of corporate governance, with particular reference to the role of independent directors on boards and audit committees and media coverage on corporate transparency and disclosure. In addition, the paper also investigates the role of the media on independent directors’ behaviours towards corporate transparency and disclosure.

Methodology: The paper uses the well-developed two-step system Generalised Method of Moment (GMM) approach on the sample of 99 Pakistan stock exchange (PSX) listed financial firms over the period of 2007-2012.

Findings: The empirical analysis shows that media and independent directors on audit committees play a significant positive role in line with agenda setting and agency theories in promoting corporate transparency and disclosure. On the contrary, the boards’ independent directors are risk averse and hold the information to protect their reputation. Nevertheless, the study does not find any significant influence of media coverage on independent directors’ behaviours in promoting corporate transparency and disclosure. Practical Implication: The findings provide some useful insight into cost benefits analysis of media coverage towards an understanding of independent directors’ behaviours. Moreover, the study findings can be useful for both shareholders and stakeholders in taking decisions about firm activities.

Originality/Value: According to our knowledge, this is the first study that proposed and tested a multi-level framework for corporate transparency and disclosure practices. In addition, this study is also among the very few studies that uses the financial sectors as a sample in particular and media coverage specifically, thus adding some value to the limited literature.

Keywords: Media Coverage, Independent Directors, Corporate Transparency and Disclosure, System GMM, Agenda Setting Theory

JEL Classification: G2, G3, M41, M48

Suggested Citation

Zaman, Rashid and Zaman, Rashid and Roudaki, Jamal and Nadeem, Muhammad, Role of Media and Independent Directors in Corporate Transparency and Disclosure: Evidence from an Emerging Economy (May 1, 2017). Available at SSRN: https://ssrn.com/abstract=3041166

Rashid Zaman (Contact Author)

Lincoln University New Zealand ( email )

Ellesmere Jct Rd, Lincoln 7647
Chrsitchurch, 7647
New Zealand

Department of AgrBusiness & Commerce ( email )

Jefferson City, MO 65101
United States

HOME PAGE: http://www.rashidzamantanoli.com/

Jamal Roudaki

Lincoln University (NZ) ( email )

PO Box 85084
Ellesmere Junction Road/Springs Road
Lincoln, 7647
New Zealand
+6433253838 Ext. 8865 (Phone)
+6433253847 (Fax)

HOME PAGE: http://www.lincoln.ac.nz

Muhammad Nadeem

University of Queensland ( email )

St Lucia
Brisbane, Queensland 4072
Australia

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