The Investigation of Ownership Concentration and Board Composition on Disclosure Quality in the Context of Minority Expropriation

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Citrawati Jatiningrum, Agrianti Komalasari, Alfiati Silfi, Lia Dama Yanti, Rina Aprilyanti, Musdalifah Dimuk

Résumé

A crucial issue in Asia when the large shareholders or majority shareholders are effectively in managing the company. It can cause opportunistic at the expense of minority shareholders, and the majority shareholder can act for expropriation the wealth of minority shareholders. This study aims to investigate the impact of ownership concentration and board composition on disclosure quality among Indonesian listed companies over the years 2011-2017 in the context of highly concentrated ownership. Multiple regression analysis is used to test the relationship between the disclosure quality as a dependent variable and certain independent variables. Results indicate that ownership concentration has a significant negative impact on disclosure quality. Board composition, firm size, and firm age have a significant positive impact on disclosure quality. However, independent commissioners and leverage are insignificant. The results also indicated that the independent commissioners should contain members with specific skills and experience to be able to improve the efficiency of information disclosure. This study provides evidence that ownership concentration and board of composition impact disclosure quality in the Indonesian companies. The study might help the policymakers and regulators for improving the requirement of disclosure to reduce the expropriation of minority shareholders

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