The Financial Performance (Profitability) and Corporate Governance Disclosure in the Annual Reports of Listed Companies of Bangladesh


  • Abdur Rouf Department of School of Business, Asian University of Bangladesh


This research aims to test empirically the relationship between the Financial Performances (Profitability) and the level of Corporate Governance Disclosure (CGD) by the listed non-financial companies in Bangladesh. Data are taken from annual reports of the listed companies in the 2007. This paper is based on a sample of 94 listed companies and Used OLS as a method of estimation. The extent of corporate governance disclosure level is measured using 40 items of information and financial performance (profitability) is measured by return on assets (ROA). Using an unweighted approach for measuring corporate governance disclosure, this approach is most appropriate when no importance is given to any specific user-groups. After establishing the disclosure index, a scoring sheet was developed to assess the extent of corporate governance disclosures. The result shows that the Financial Performances (Profitability) and Board Audit Committee are positively correlated with the level of Corporate Governance Disclosure (CGD). Percentage of Equity Owned by the Insiders is negatively associated with the Corporate Governance Disclosure. The study provides empirical evidence to policy makers and regulators in South Asia.


Aktaruddin, M., Hossain, M. A., Hossain, M. & Yao Lee (2009). Corporate Governance and Voluntary Disclosure in Corporate Annual Reports of Malaysian Listed Firms. The Journal of Applied Management Accounting Research, vol. 7, nr.1

Ahmed and John (1999). Associations between Corporate Characteristics and Disclosure Levels in Annual Reports: A Meta-Analysis. British Accounting Review nr. 31, p. 35–61

Barako, D.G., Hancock, P., Izan, H. Y (2006). Factors influencing voluntary corporate disclosure by Kenyan companies: Corporate Governance, An International Review 14 (2): p. 107-125.

Bradbury, M.E (1990). The incentives for voluntary audit committee formation, Journal of Accounting and Public Policy, 9, p. 19-36

Bujaki and McConomy (2002). Corporate governance: Factors Influencing Voluntary Disclosure by Publicly Traded Canadian Firms, Canadian Accounting Perspectives-1: p.105-139.

Chau, G. K., and Gray, S. J (2002). Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore, The International Journal of Accounting 37 (2): p. 247-264.

Dulacha, G .B., Phil, H., Izan, H.Y (2006). Relationship between Corporate Governance attributes and Voluntary Disclosure in Annual Reports: The Kenyan Experience. Financial Reporting, Regulation and Governance, 5:1, p. 2006

Eng, L.L. and Mak, Y.T (2003). Corporate governance and voluntary disclosure, Journal of accounting and Public Policy, 22 (4), p. 325-345.

Haniffa, R.M., Cooke, T.E (2002). Culture, corporate governance and disclosure in

Malaysian corporations, ABACUS, 38 (3), p. 317-350

Ho, S.S.M., Wong, K.S (2001). A study of corporate disclosure practices and effectiveness in Hong Kong. Journal of International Financial Management and Accounting, 12(1), p. 75-101.

Hossain, M., Islam, K., Andrew, J (2006). Corporate Social and environmental disclosure in developing countries: evidence from Bangladesh, The Asian Pacific conference on International Accounting Issues, Hawaii, October 2006

Hossain, M., Tan, L. M. and Adams, M (1994). Voluntary disclosure in an emerging capital market: Some empirical evidence from companies listed on the Kuala Lumpur Stock Exchange. International Journal of Accounting 29: p. 334-351.

Hongxia, Li., Ainian, Qi (2008). Impact of Corporate Governance on Voluntary Disclosure in Chiness Listed Companies, Corporate Ownership & control/ Volume 5, Issue-2, Winter 2008.

Ibrahim, Haron and Ariffin (2000). Voluntary disclosure items: A note on Indonesia, The Malaysia Accountant, October, 12-19

Karim, A.K.M.W (1996). The association between corporate attributes and the extent of corporate disclosure, Journal of Business Studies, University of Dhaka, 17(2), p. 89-124.

Kusumawati, D. N (2006). Profitability and Corporate Governance Disclosure: An Indonesian Study, Simposium Nasional Akuntansi 9 Padahg, 23-26 Augusts, K-INT-14, p.1-19

Lakhal, F (2005). Voluntary earnings disclosures and corporate governance: Evidence from France. Review of Accounting and Finance 4 (3): p. 64-85.

Lobo, G.J., Zhou, J (2001). Disclosure quantity and earning management, paper presented at the 2001 Asia Pacific Journal of Accounting and Economics, Symposium in Hong Kong.

McKinnon, J. L., L. Dalimunthe (1993). Voluntary disclosure of segment information by Australian diversified companies. Accounting and Finance 33 (1): p. 33-50.

McMullen, D.A (1996). Audit committee performance: An investigation of the consequences associated with audit committee, Audditing, 15, p. 87-103

Meek, G., Roberts, C.B., Gray, S.J (1995). Factors influencing voluntary annual report disclosures by U.S., U.K. and continental European Multinational corporations, Journal of International Business Studies (Third Quarter), p. 555-572.

Mohd Ghazali, N. A., P. Weetman (2006). Perpetuating traditional influences: Voluntary disclosure in Malaysia following the economics crisis. Journal of International Accounting, Auditing and Taxation 15 (2): p. 226-248

Oliveira, L., L. L. Rodrigues., R. Craig (2006). Firm-specific determinants of intangibles reporting: Evidence from the Portuguese stock market. Journal of Human Resource Costing & Accounting 10 (1): p.11-33.

Samir, M. et al. (2003). An Empirical Investigation of Corporate Voluntary Disclosure of Management’s Responsibilities for Financial Reporting, Lubin School of Business Faculty Working Papers, Pace University

Watson, A., Shrives, P., Marston, C (2002). Voluntary disclosure of accounting ratios in the UK, British Accounting Review 34 (4): p. 289-313.

Wallace, R. S. O., Naser, K. and Mora, A (1994). The relationship between the comprehensiveness of corporate annual reports and firm specific characteristics in Spain. Accounting and Business Research 25 (97): p. 41-53.

Wallace, R.S.O., Naser, K (1995). Firm-specific determinants of the comprehensiveness of mandatory disclosure in the corporate annual reports of firms listed on the stock exchanges of Hong Kong. Journal of Accounting and Public policy, 14 (2), p. 311-368