Document Type : Research Paper
Abstract
Purpose: Voluntary risk disclosure is considered an important aspect of corporate reporting, as it plays a crucial role in reducing information asymmetry in the market. The consequences of such reporting may vary in different corporate governance environments. So The purpose of research is investigating the role of corporate governance as a moderating variable on the effects of risk disclosure on the firm financial performance.
Method: Data from 166 listed companies on the Tehran Stock Exchange during the period of 2013-2022 was collected and analyzed using a multiple linear regression approach with a panel data analysis method.
Result: The results of the empirical model depict that risk disclosure has a positive and significant impact on firm financial performance. Furthermore, corporate governance strengthens the positive effect of risk disclosure on firm financial performance.
Conclusion: The findings suggest that voluntary risk disclosure, by reducing information asymmetry and building stakeholder trust, leads to a reduction in capital costs and ultimately improves firm performance.
Implication: This research provides a new recommendation for further exploration in the consequences of voluntary risk disclosure and emphasizes the importance of corporate governance in listed companies. It highlights the need for policymakers to pay attention to and emphasize the implementation of corporate governance regulations in the stock market.
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