The Impact of Board Diversity on the Relationship Between Shareholders Wealth and Un-Compulsory Disclosure in Jordanian Commercial Banks

Authors

DOI:

https://doi.org/10.26668/businessreview/2023.v8i10.3726

Keywords:

Board Diversity, Un-compulsory Disclosure, Shareholders Wealth, Banks and Jordan

Abstract

Purpose:  This study aims to examine the association between un-compulsory disclosure and shareholders wealth among Jordanian banks. Moreover, it investigates the effect of the board diversity on the relationship between un-compulsory disclosure and shareholders wealth.

 

Theoretical framework:  Prior studies have reported that board diversity plays an important role in taking decisions like disclosing more information or distributing earnings. Despite the importance of board diversity, there is no study used as moderating variable to investigate the relationship between un-compulsory disclosure and shareholders wealth.

 

Design/methodology/approach:  This study covers all commercial banks listed on Amman Bursa. It has used checklist instrument to measure the level of un-compulsory disclosure; return on equity and market value to measure shareholders wealth; and board nationality and female on board of directors to measure the diversity. Hierarchical regression analysis was used to achieve the objectives.

 

Findings:  The findings show that banks with high shareholders wealth are more likely to reveal un-compulsory information to help stakeholders. Furthermore, this study provides creative evidence that female members play a main role as moderating variable that influence management motivations toward practices of un-compulsory disclosure and shareholders wealth.

 

Research, Practical & Social implications:  This study suggests that regulatory bodies issue and develop the current code about the diversity of the board, especially more female representation on boards.

 

Originality/value:  this study provides creative evidence that female members play a main role as moderating variable that influence management motivations toward practices of un-compulsory disclosure and shareholders wealth.

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Published

2023-10-23

How to Cite

Karajeh, A. I., & Jaradat, A. Q. (2023). The Impact of Board Diversity on the Relationship Between Shareholders Wealth and Un-Compulsory Disclosure in Jordanian Commercial Banks. International Journal of Professional Business Review, 8(10), e03726. https://doi.org/10.26668/businessreview/2023.v8i10.3726