Risk disclosure in annual reports of South African public universities

Abstract

RISK DISCLOSURE IN ANNUAL REPORTS OF SOUTH AFRICAN PUBLIC UNIVERSITIES Risk disclosure is essential for effective decision-making by stakeholders in organisations. Detailed risk disclosure practices are integral to South African universities in realising their governance, operational or strategic objectives. While risk disclosure is a well-investigated notion, most studies examine this concept in financial institutions rather than at public universities. Therefore, this study recognised the importance of investigating risk disclosure practices of South African universities. Using the Department of Higher Education and Training (DHET) regulations and King IV risk disclosure practices, a document analysis was carried out on 18 reports covering the 2015, 2019 and 2022 financial years of six selected universities. The study's findings revealed that the universities are disclosing their risk management practices, thus presenting an improved disclosure since the publication of the King IV report in 2016. Moreover, these universities have incorporated the DHET regulations when reporting on information involving the assignment of duties to management by university councils, the governance of risks, and disclosures on the audit and risk committee functions. However, It was found that most reports lacked the disclosure of information on administration-related risks, risk approach and the role of relevant parties in the combined assurances. The current study offers new insights and an understanding of the body of risk management knowledge within higher education institutions (HEIs). The study's findings are important to academics, who may duplicate this study in other industries to prove the rationality of the findings. Regarding practical implications, the findings are important in supporting risk professionals to comprehend risk disclosure boundaries within the context of universities. Furthermore, the findings could contribute to policy formulation by the DHET. This study is one of the few to investigate risk disclosure by public universities in South Africa.