Board composition and corporate risk disclosure "CRD" : evidence from Kuwait

Abstract EN

Objectives: The purpose of this study is to investigate the impact of board composition on corporate risk disclosure (CRD) in non-financial firms listed on the Kuwait Stock Exchange (KSE).

Method: Taking into consideration that the sample size consists of 90 non-financial listed firms at the end of 2019, the study used the Ordinary Least Square (OLS) regression and divided the board composition into three variables related to board directors; board size, board independence, and family directors, in addition to the control variables that are: debt ratio, firm size, and industry type.

Results: The study found that board size positively impacts CRD while family directors negatively impact CRD.

Thus, the study concluded that not all board composition mechanisms in Kuwait work effectively concerning risk disclosure.

Conclusion: This study is well-timed as its findings provide important information to regulators seeking to update the rules related to board of directors.

This study can help Investors and firms when making important decisions.

Academic researchers interested in corporate governance and disclosure can also use the results of this study in their further potential research in Kuwait.

The results of this study are limited by data being collected only from annual reports in some non-financial firms listed in Kuwait Stock Exchange (KSE).

For this reason, we note that this document may not totally contain all information related to CRD.

Notably also that the new laws related to having independent directors did not exist before 2017.

In addition to that, this study ignored the issue of endogeneity relationships among board variables.