Organizational culture and corporate risk disclosure: An empirical investigation for United Arab Emirates listed companies

摘要

Purpose - The main purpose of this paper is to investigate the relationship between organizational culture and corporate risk disclosure for listed companies in the United Arab Emirates (UAE). Design/methodology/approach - The organizational culture is represented by four dimensions: Clan, Adhocracy, Market and Hierarchy (Cameron and Quinn, 1999). Data are computed from the financial reports of all listed companies on the UAE Stock Market as of the year ending 2005. The multiple regression analysis model, ordinary least square, is used to test the study hypotheses. Findings - Results show that the organizational culture of Hierarchy, which focuses on more formalized work procedures, has a significant positive effect on the companies' risk disclosure in the UAE business environment. Several other control variables are implemented to ensure reliability of results. Practical implications - Listed companies in the UAE are more responsive to formal rules and regulations on reporting risk disclosure, which is quite different from the "self-regulation" practices that are more common in some Western countries. Consequently, policymakers and regulators in the UAE, and in other countries with similar conditions, are encouraged to focus on continuous development of formal rules and procedures to enable more harmony with international best practices of risk disclosure. Originality/value - Unlike the majority of previous empirical studies, this is the first study to incorporate a behavioral endogenous organizational culture model to explain the main determinants of risk disclosure, which opens the door for more understanding of the risk disclosure output function as a management process.