Moderating Role of Risk Management Committee on Board of Directors’ Characteristics and Corporate Risk Disclosure Nexus: Emerging Market Evidence

This study investigates the extent of corporate risk disclosure (CRD) in Jordanian non-financial organizations while also looking at the impact of four unique board of directors’ features—namely, board size, the regularity of board meetings, CEO duality, and board experience—on the degree of risk disclosure. The study also examines the risk management committee’s (RMC) moderating function in improving the correlation between the traits of the board of directors and risk disclosure, a subject that has not been covered well in the Jordanian setting. The study analyzed 900 annual reports from non-financial companies listed on the Amman Stock Exchange (ASE) between 2014 and 2023. To evaluate risk disclosure, the reports were subjected to content analysis using counts of risk-related phrases. The hypotheses were tested using a random effects regression model. The number of risk disclosure statements varies from 2 to 10 per business, with an average of 24. Although CEO duality has a detrimental impact on risk disclosure levels, the findings demonstrate that industry sector and board competence have a positive effect. The leverage, the sort of audit company, the size of the firm, the frequency of board meetings, or the size of the board have no discernible effect. In particular, having an RMC significantly enhances the positive effects of board features on risk reporting. This study provides the first empirical data in Jordan on the impact of the RMC on the relationship between the traits of the board of directors and corporate risk disclosure in the non-financial industry. As a result, it fills a major gap in the literature on risk disclosure and corporate governance. Furthermore, it is the first study to use a modern and thorough measure for evaluating risk disclosure while also taking into account data from both before and after the changes to the Jordanian Corporate Governance Code. The study’s findings are made more relevant, rigorous, and contextual by this two-way contribution.