Do better-governed Australian firms make more informative disclosures?

We investigate whether and if so, how, corporate governance "quality" is related to the information flows from a company and how the stock market and its agents respond. Specifically, we study links between the "quality" of a firm’s corporate governance (CGQ) and the informativeness of its disclosures. We employ a novel, intra-year "timeliness" metric, in the spirit of Ball and Brown (1968) and Brown et al. (1999), to capture the average speed of price discovery throughout the year. Our results suggest that the answer to our question is "Yes": better-governed firms do make more informative disclosures

Do Better-Governed Australian Firms Make More Informative Disclosures?

We investigate whether and if so, how, corporate governance 'quality' -super-1 is related to the information flows from a company and how the share market and its agents respond. Specifically, we study links between the 'quality' of a firm's corporate governance (CGQ) and the informativeness of its disclosures. We employ six indicators of informativeness. They include document counts, properties of analysts' forecasts and a 'timeliness' metric, in the spirit of Ball and Brown (1968) , that reflects the average speed of price discovery throughout the year. Our results suggest the answer to our question is 'Yes': better-governed firms do make more informative disclosures. Copyright Blackwell Publishers Ltd, 2006.