The Role of Disclosure in Corporate Governance
The Role of Disclosure in Corporate Governance The Role of Disclosure in Corporate Governance
Why disclosure is important (in termsof concrete advantages for the Market)• Strong transparent disclosure regime is pivotal for marketbasedmonitoring of companies and central toshareholder ability to exercise ownership rights.• Can be powerful tool for influencing companies andprotecting investors.• Can help to attract capital and maintain confidence in themarkets.• Weak disclosure can contribute to unethical behaviourand loss of market integrity, costing not only company buteconomy as a whole.• Insufficient or unclear information may hamper ability ofmarkets to function, increase cost of capital and result inpoor resource allocation.
Why disclosure is important(in terms of concrete advantages for theCompany)• Reliable and timely information increases confidence amongdecision-makers within the company and enables them to make goodbusiness decisions directly affecting growth and profitability.• Information also affects decision makers outside the entityshareholders,investors and lenders, who must decide where andwith what risk to place their money.• The information provided, show the decision-makers and outsideinterests whether and to what extent corporations meet legalrequirements.• Disclosure helps public understanding of a Company's activities,policies and performance with regard to environmental and ethicalstandards, as well as its relationship with the communities where theCompany operates (relations with Stakeholders).• Disclosure and transparency, as well as proper auditing, serves as adeterrent to fraud and corruption, allowing firms to compete on thebasis of their best offerings and to differentiate themselves from firmswho do not practice good governance
- Page 1 and 2: Role of Disclosure in CorporateGove
- Page 3 and 4: DisclosureTransparency is letting t
- Page 5: International Standards - OECD• T
- Page 9 and 10: What information should be disclose
- Page 11 and 12: What information should be disclose
- Page 13 and 14: Role of disclosure preventingfinanc
Why disclosure is important (<strong>in</strong> terms<strong>of</strong> concrete advantages for the Market)• Strong transparent disclosure regime is pivotal for marketbasedmonitor<strong>in</strong>g <strong>of</strong> companies and central toshareholder ability to exercise ownership rights.• Can be powerful tool for <strong>in</strong>fluenc<strong>in</strong>g companies andprotect<strong>in</strong>g <strong>in</strong>vestors.• Can help to attract capital and ma<strong>in</strong>ta<strong>in</strong> confidence <strong>in</strong> themarkets.• Weak disclosure can contribute to unethical behaviourand loss <strong>of</strong> market <strong>in</strong>tegrity, cost<strong>in</strong>g not only company buteconomy as a whole.• Insufficient or unclear <strong>in</strong>formation may hamper ability <strong>of</strong>markets to function, <strong>in</strong>crease cost <strong>of</strong> capital and result <strong>in</strong>poor resource allocation.
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