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Keywords:

  • corporate governance quality;
  • disclosure frequency;
  • analysts’ forecasts;
  • price discovery;
  • timeliness

Abstract:  We investigate whether and if so, how, corporate governance ‘quality’1 is related to the information flows from a company and how the share market and its agents respond. Specifically, we study links between the ‘quality’ of a firm's corporate governance (CGQ) and the informativeness of its disclosures. We employ six indicators of informativeness. They include document counts, properties of analysts’ forecasts and a ‘timeliness’ metric, in the spirit of Ball and Brown (1968), that reflects the average speed of price discovery throughout the year. Our results suggest the answer to our question is ‘Yes’: better-governed firms do make more informative disclosures.