Evaluating the corporate governance disclosure practices in the annual reports of BRICS banks

Abstract

This study evaluated the disclosure of corporate governance practices in the annual reports of the top five banks listed in the BRICS countries between the year 2021-2022. The study aimed to evaluate corporate governance disclosure practices in the annual reports of BRICS banks, and the first objective compared corporate governance disclosure practices among BRICS banks within each construct. Four constructs were identified as part of the measuring instrument, the second objective compared the relationship between the BRICS countries on the disclosure of corporate governance practices. The exploratory mixed method design was used to evaluate and understand how BRICS-listed banks disclosed their corporate governance practices. The study relied on secondary data in the banks' annual or sustainability reports for 2021 to 2022. A criterion of purposeful sampling was used to select the top 5 banks from the BRICS countries listed on their respective stock exchanges. Five banks were selected from each BRICS country, except for Russia, which had two banks represented. The selection of banks was based on their market capitalisation. The Statistical Package for Social Sciences (SPSS) software analysed the data. Descriptive statistics were used to comprehend and analyse the variables used in the study. To compare means, ANOVA was employed. The study findings revealed that there is good disclosure of corporate governance practices by BRICS banks. However, the study also found that certain areas of corporate governance disclosure practices need improvement, particularly in the qualifications and biographical information of directors, the amount charged by external auditors, and policies on whistleblowing, which could potentially hinder users' decision-making in the annual reports of BRICS's top 5 listed banks. To the researcher's knowledge, this was the first study to examine the disclosure practices related to corporate governance in the annual reports of BRICS banks. As a result of the literature review, the research produced a CGDI checklist for the banking sector. The developed framework could potentially be utilised in the banking sector. It is recommended that those countries that still have voluntary disclosures move towards more strict regulations. It is recommended that this information should be disclosed more because shareholders and investors rely on qualifications and biographical information for informed investment decisions. It is recommended that the amount charged by external auditors be disclosed in the annual report. In addition, the number of cases submitted, the number of cases investigated, and the number of cases unresolved and concluded are provided in the bank's annual reports.