School of Business and Economics

Permanent URI for this community

https://repository.daystar.ac.ke/handle/123456789/2889

Browse

Browsing School of Business and Economics by Subject "Agency theory"

Now showing 1 - 2 of 2
  • Thumbnail Image
    Item
    An Empirical Examination of Board-Related and Firm-Specific Drivers on Risk Disclosure by Listed Firms in Kenya: A Mixed-Methods Approach
    (Emerald Publishing Limited, 2022-07) Mbithi, Erastus; Moloi, Tankiso; Wangombe, David
    Purpose – This study aims to examine the effect of board-related and firm-specific drivers on quality of risk disclosure (RD) by listed firms in Kenya. Design/methodology/approach – This study uses explanatory sequential mixed-method. The quantitative approach uses content analysis to measure quality of RD and panel data regression to examine the effect of board-related and firm-specific factors on quality of RD. The results of regression analysis are informed by qualitative analysis through interviews with preparers of the annual report. Findings – The results reveal that quality of RD is low but greater in the post-regulation than in the preregulation period. Additionally, the results of regression and interview analysis show that board-related (board independence and board gender diversity) and firm-specific factors (firm size and leverage) positively influence the quality of RD. Research limitations/implications – This study focused on listed non-financial firms; this may affect the generalisation of the findings among financial firms. Practical implications – The findings highlight the effectiveness of the Companies Act in improving RD practice in Kenya. However, the low-quality RD suggests that more consideration should be taken to review the current regulations. This study also suggests that board independence, board gender diversity, leverage and firm size are attributes that require regulatory focus to enhance quality of RD. Social implications – This study contributes to the ongoing discussions about RD to improve worldwide. Originality/value – This paper adds to the limited studies investigating RD and drivers using mixed methods in developing countries. Specifically, this study develops a novel measure of RD and examines its drivers (board-related and firm-specific) using agency and institutional theories
  • Thumbnail Image
    Item
    Corporate governance and risk disclosures: An empirical study of listed companies in Kenya
    (African Journal of Business Management, 2019) Wachira, David Muturi
    This paper examines the relationships between corporate governance variables and the extent of risk disclosures among listed companies in Kenya. The study aims to empirically examine the relationship between corporate governance variables and risk disclosures in 48 listed non-financial companies in Kenya. Content analysis of annual reports for the period 2010-2016 was used to measure the level of risk disclosures and compute the risk disclosure index for each company studied. The relationships between variables were analysed using panel data analysis. The findings show that the percentage of non-executive directors, ownership dispersion, percentage of foreign ownership, women in boards affected significantly the level of risk disclosures in the studied companies. Additionally, the control variables, firm’s size and firm’s profitability also significantly affected the level of risk disclosures. It can be concluded that the agency theory and the signalling theory can be used to explain the risk disclosure behaviours of listed firms in Kenya. It is recommended that companies should strengthen their corporate governance mechanisms in order to deal with risks facing them.