The association between board composition and different types of voluntary disclosure : A quantitative study of Chinese and Swedish listed companies

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Company’s annual report has been widely used by stakeholders such as investors, employees, suppliers, customers and creditors. Information included in annual report consists of both mandatory information required by law, regulations as well as accounting standard and voluntary information depended on management’s judgments. We find that voluntary information vary from company to company. From corporate governance field, we find that the company’s board of directors plays an important role in monitoring the management’s performance and have an impact on management’s judgment, including their decision to disclose information in annual report. Board of directors comprises inside and independent directors. Both of them have incentives to disclose information in annual report.In this study, we use quantitative method to examine the association between board composition and different types of voluntary disclosure in listed companies in the Shanghai stock exchange (SSE) of China and OMX Nordic Exchange Stockholm. The board composition is measured by the proportion of independent directors to total number of directors on the board. Voluntary disclosure has been classified into three categories: Strategic information, non-financial information and financial information.The results show that there is no significant association between board composition and voluntary disclosure from our samples Chinese and Swedish companies. However, we find association between different types of voluntary disclosure and firm characteristics. We find significant negative association between strategic information and financial leverage for Chinese companies. We find significant negative association between financial information and equity-based management compensation in Swedish companies. On comparison, w...