THE BOARD’S ROLE IN RISK DISCLOSURE. AN EXPLORATORY STUDY IN ITALIAN LISTED GOVERNMENT-OWNED COMPANIES

Risk disclosure has attracted a growing attention in financial reporting practice and regulation and criticisms regarding inadequate empirical studies on risk disclosure in the period during and after the 2008 financial crisis occur among scholars (i.e. Abraham et al. 2012; Linsley 2011). Given this importance, whilst a large number of studies has focused on the drivers of risk disclosure in the private sector (i.e. Kravet and Muslu 2013) there is a lack of empirical evidence on determinants in Government-owned Companies (here after GoC). GoC manage public money and pursue social objectives that coexist with economic ones (Calabrò et al. 2013). In serving a public interest, GoC may comply with the accountability paradigm providing more transparency on disclosure (Greco et al. 2014). Risk disclosure is a fundamental part of this accountability process, empowering citizens by knowledge on the future of GoC (Ferguson et al. 2002). Drawing from agency and signalling theories, the research aims to investigate whether the board of directors is a determinant of risk disclosure in Italian GoC. This is the first study exploring how governance mechanisms might promote (or impede) risk disclosure in the public domain.