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Title: Family ownership, board independence and voluntary disclosure : evidence from Hong Kong
Authors: Chau, G
Gray, SJ
Keywords: Board independence
Corporate governance
Family ownership
Independent chairman
Voluntary disclosure
Issue Date: 2010
Source: Journal of international accounting, auditing and taxation, 2010, v. 19, no. 2, p. 93-109 How to cite?
Journal: Journal of International Accounting, Auditing and Taxation 
Abstract: This paper empirically examines the relationship between the extent of voluntary disclosure and levels of family ownership and board independence including the influence of an independent chairman. Using hand-collected data on voluntary disclosure for a sample of 273 listed firms in Hong Kong for the year 2002, the results show that at moderate to low levels of family shareholding (25% or less), the convergence of interest effect is dominant and the extent of voluntary disclosure is relatively low. At higher levels of family shareholding (more than 25%), the entrenchment effect dominates and is associated with higher voluntary disclosure. In addition, the results show that the appointment of an independent chairman is positively associated with the level of voluntary disclosure. Most importantly, the appointment of an independent chairman appears to mitigate the influence of family ownership on voluntary disclosures, and holds for firms with a non-independent chairman. While the extent to which independent non-executive directors are appointed to the board is positively associated with voluntary disclosure, the role of such directors is mitigated by the role of chairman.
ISSN: 1061-9518
DOI: 10.1016/j.intaccaudtax.2010.07.002
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