The Effect of Governance Structure on the Risk Information Disclosure Practices of Not-For-Profit Organisations

Wan Ainul Asyiqin Wan Mohd Razali, Hamizah Abdul Razak and Salsabila Abd. Rahim
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Wan Ainul Asyiqin Wan Mohd Razali: Faculty of Business, Economics and Social Development, UMT, Terengganu, Malaysia
Hamizah Abdul Razak: Faculty of Economics and Management, UKM, Selangor, Malaysia
Salsabila Abd. Rahim: Faculty of Accountancy, UiTM Puncak Alam, Selangor, Malaysia

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 9, 9425-9444

Abstract: Disclosure is a key component of good governance, and within this context, disclosure of risk-related information is crucial for stakeholders' decision-making. Using agency theory, this study examines the effect of internal and external governance structures on risk disclosure in Malaysian not-for-profit organisations (NPOs). Content analysis was conducted on 120 NPOs to determine the level of risk disclosure, measured by the number of pages in annual reports. Results show a significant positive association between risk disclosure and board size and board interlock, while board international experience, board financial expertise, auditor type, and audit fee showed no significance. These findings underscore the importance of effective governance structures in influencing risk disclosure. The study contributes to the literature on risk accountability and governance, providing insights for improving transparency and accountability in the not-for-profit sector. The findings help to justify greater intervention among regulators and policymakers regarding the not-for-profit sector's governance, transparency, and accountability.

Date: 2025
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