The interplay of board and audit committee quality governance in shaping disclosure quality in the UK market

Nooraisah Katmon, Omar Farooque and Wonlop Buachoom

Journal of Accounting & Organizational Change, 2026, vol. 22, issue 7, 270-302

Abstract: PurposeUsing the UK’s relatively less regulated “comply or explain” institutional setting as a lens, this paper aims to investigate the aggregate effects of audit and board committee quality governance effectiveness on financial disclosure and their complementary or substitutive relationships in UK-listed companies.Design/methodology/approachThe sample of the study is based on 170 firms selected from either winners or runner-up (second position) for the Investor Relations Magazine Award and their matched-pair 170 control sample firms. Different methods are used to test the hypotheses developed, depending on the variables of interest, such as Poisson regression, logistic regression and Durbin–Wu–Hausman endogeneity test.FindingsResults suggest that audit committee quality effectiveness has an incremental positive effect on disclosure quality. Moreover, board committee quality effectiveness appears to have a partially significant impact on disclosure quality, while other board characteristics, such as board size, board meetings and board independence, show significant positive effects on disclosure quality. Additional analyses support the view that effective board committee quality complements audit committee quality in improving disclosure quality in large firms, rather than in small firms, thereby reducing information asymmetry per the proposed governance. Further evidence shows that audit committee quality is more effective in large firms compared to small firms.Research limitations/implicationsDisclosure quality measurement is a subjective and complex matter that has been extensively debated in the literature. This study is not an exception.Practical implicationsThe findings suggest that board and audit committee quality can contribute incrementally to improving disclosure quality in UK firms.Originality/valueThis study expands upon existing literature and offers valuable insights for regulators, investors and other stakeholders concerning the potential advantages of improving audit committee effectiveness, an imperative consideration for the cultivation of strong and robust governance systems.

Keywords: Disclosure quality; Board quality; Audit quality; UK (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaocpp:jaoc-05-2025-0143

DOI: 10.1108/JAOC-05-2025-0143

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