Empirical Evidence on the Reality of Corporate Governance Practice in the Kingdom of Bahrain

Abstract

This study aims mainly to examine the extent to which listed companies in Bahrain Bourse (BHB) comply with corporate governance (CG) disclosure requirements in the light of the Bahraini CG Code. The study extends prior studies accomplished in this area of accounting research. A CG disclosure index of 45 information items is developed and used. Data needed for the empirical study is gathered for 42 listed companies covering two years, 2019 and 2020. The main dependent variable is the extent of CG disclosure, while four board factors are used as independent variables, including board size, board independence, board number of meetings and board gender. Findings indicate that most listed companies in Bahrain highly involve in GC practices and comply with CG disclosure requirements of the Bahraini CG Code and the level of CG disclosure is generally high. Hierarchical Multiple Regression (HMR) shows significant positive impacts of board independence and board number of meetings on the dependent variable; while none of board size and board gender is found as a determinant of the extent of CG disclosure by listed companies in BSE. This study might contribute to the existing literature on board factors determining CG disclosure in Bahrain. It provides an understanding of determinants of CG disclosure practices which may offer a new dimension for this area of accounting research.