Title: The effect of financial incentives for the board of directors on the disclosure level of the quantity and coverage of risks in Jordanian industrial companies

Authors: Ashraf Bataineh; Ziyad Mustafa Shwiyat

Addresses: Department of Financial and Administrative Sciences, Al-Huson University College, AL-Balqa Applied University, Jordan ' Department of Financial and Administrative Sciences, Al-Huson University College, AL-Balqa Applied University, Jordan

Abstract: This study aimed to assess the effect of financial incentives for board members on the disclosure level of both the quantity and coverage of risks within Jordanian industrial companies. To gather data for the study analysis variables spanning from 2019 to 2022, the financial reports of these companies were examined by using statistical analysis program SPSS. The findings indicate a positive correlation between financial incentives, specifically the ownership percentage of non-executive board members and their financial expertise, and the disclosure level of quantity risks within these companies. Furthermore, the results reveal a negative relationship between board member salaries and compensation, and disclosure level of both the quantity and coverage aspects of company risks. Conversely, the educational level of board members positively influenced the disclosure of risk coverage. Regulatory authorities are recommended to encourage companies to strengthen their adherence to corporate governance standards in regulating the disclosure level of company risks.

Keywords: financial incentives; board of directors; disclosure; corporate risks; Jordanian industrial companies.

DOI: 10.1504/IJBCRM.2024.140574

International Journal of Business Continuity and Risk Management, 2024 Vol.14 No.3, pp.209 - 229

Received: 27 Sep 2023
Accepted: 25 Oct 2023
Published online: 27 Aug 2024 *

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