Does corporate governance affect financial communication transparency? Empirical evidence in the Tunisian context

Abstract

The present study is focused on investigating the relationship between intentional governance mechanisms (Directors’ boards, Ownership structure and audit quality) and financial communication transparency. For this purpose, a model is used and applied to Tunisian firms’ sample observed over the period 2006–2013. The achieved results reveal that intentional governance mechanisms are positively related to a higher transparency level noticeable in financial communication (voluntary disclosure and quality information). In addition, empirical tests indicate that financial communication transparency is highly dependent on the board size, ownership concentration, as well as on audit quality.

Keywords:

• transparency
• corporate governance
• financial communication
• voluntary disclosure
• earning management
• information

Public Interest Statement

The goal of our research is to introduce the relationship between financial communication and corporate governance conducted in the Tunisian context. This study was the subject of three articles: the first published: “Accounting conservatism and earning timeliness: Impact on Corporate Governance Index”, the second is accepted in your journal: “Does corporate governance affect Financial communication transparency? Empirical evidence in the Tunisian context” and the third is in revision: “Causal relationship between financial communication and corporate governance in Tunisian context”.

Notes

1. The corporate governance notion was soon to be debated in Tunisia, thanks to the work of the Arab Institute of Entrepreneurs (AIE). A few years later, convinced that governance practices increase the value of the company, AIE, in collaboration with the company’s Private International Centre, has set up a project aimed is publishing a guide to governance practices for Tunisian companies. The guide, published in June 2008, aims to make the Tunisian corporate governance system transparent and intelligible.

Additional information

Funding

Funding. The authors received no direct funding for this research.

Notes on contributors

Maali Kachouri Ben Saad

Kachouri Ben Saad Maali, PhD, is an associate researcher at LARTIGE (Laboratory of Research) in the University of Sfax, Tunisia. She is the corresponding author and her research interests are in financial information, voluntary disclosure and corporate governance.

Anis Jarboui

Jarboui Anis, PhD, is a professor of finance and accounting at the University of Sfax, Tunisia. His research interests are in corporate governance, financial literacy and behavioural finance.