BOARD STRUCTURE AND VOLUNTARY DISCLOSURE OF LISTED INDUSTRIAL GOODS COMPANIES IN NIGERIA..
1.0 INTRODUCTION
Annual reports are the primary medium various stakeholders rely on for making decisions. Thus management, responsible for preparing the annual reports, is accountable to all the stakeholders. As a result, they should disclose all relevant information in the annual reports for stakeholders to make efficient economic decisions. In addition, increased disclosures of information, apart from the ones required by the standards and the regulators are important. These additional disclosures protect the interest of minority shareholders and ensure transparency of company’s information to its interested parties. Meek, Roberts and Gray (1995), define voluntary corporate disclosure as disclosures in excess of requirements in annual reports and other media as deemed relevant by the company management for an effective decision-making by the users of the financial reports. However, agency theory assumes a separation of ownership from control would lead to agency problems, as the agents will not always maximize the shareholder value. And hence, the incentive for the management to provide additional disclosures decreases. Moreover, the controlling shareholders in a company mostly maximize their self-interest rather than that of the minority shareholders. Thus, there is increased emphasis on the need to ensure the protection of the interests of minority shareholders. Minority shareholders are entitled to receive all relevant information to make an informed judgment on the performance of the company. Disclosure of less voluntary information to the minority shareholders is one way controlling shareholders expropriate minority shareholders.
Most of the disclosure studies examining the association between ownership structure and voluntary disclosure were conducted elsewhere around the world (such as Eng & Mak 2003, Ghazali & Weetman 2006, El-Gazzar 1998, and Barako, Hancock & Izan 2006). However, the impact of ownership structure on corporate voluntary disclosure practices, remains unexplored in emerging stock markets especially Nigeria. The main objective of this study is to examine the impact of ownership structure on voluntary disclosure in the Nigerian listed industrial goods companies