Purpose: The relationship between corporate governance and accountability are mutually facilitative, inclusive and interdependent, has been recognised as multidimensional, and can be embodied in a variety of systems. This research specifically aims to investigate the interrelationship of the quality of corporate governance mechanisms and accountability practices, and to suggest opportunities for future research. It also provides some specific recommendations to help improve governance standards. The motivation underpinning this investigation can be attributed to the governance failures and weaknesses observed in the global banking crisis of 2007-2008.
Design/methodology/approach: Based on stakeholder theory, this study uses content analysis to investigate corporate governance narrative disclosures in large banks annual reports over a continuous twelve-year period between 2001 and 2012. A long-term timeframe approach is adopted to look into the evolution and resulting differences of corporate governance disclosure levels for the specific selected banking firms.
Findings: The analysis of the findings in this study showed that the volume of corporate governance disclosures for all the selected banking firms increased over time. Findings also suggest that some of the outcomes of previous academic studies on general firm corporate governance do not support bank corporate governance. Overall, the performance category shows the most improvement in disclosure scores over the sample period, while the least improved disclosure category was accountability. These findings confirm the importance of stressing information quality disclosure and that there is still significant progress required.
Research limitations/implication: The study focuses only on the corporate governance disclosure practices in corporate annual reports. Corporate governance disclosure can be through other forms of communication or media, such as corporate websites, surveys, questionnaires, and press releases which are not considered within the scope of this study.
Practical implications: The apparent lack of type 3 and type 4 disclosures in corporate governance reporting suggests a relative paucity of agreed definitions and technical details in the disclosures. It also offers policy makers and regulatory standard setters the opportunity to develop detailed and specific guidelines regarding corporate governance disclosure requirements that goes beyond the traditional minimum requirements for compliance and disclosures.
Originality/value: The study findings added to a growing body of literature and make two main contributions. First, it contributes to the development of methodology in accounting research; the type of content analysis method created in this research represents an expansion and enhancement of previous technique. Second, it contributes to the understanding of corporate governance disclosure in the banking industry on a longitudinal basis.
Keywords: Corporate Governance, Accountability, Bank disclosures, Content Analysis, Categories