Developments in non-mandatory disclosures in annual reports of companies: A case study

The paper investigates the extent of non-mandatory disclosure of information (NMD) in the annual reports of the 17 companies listed on the South Pacific Stock Exchange (SPSE) in Fiji, a developing country, and whether NMD by these companies has changed over time providing additional and useful information to stakeholders. The empirical data was gathered from the years 2008 to 2010 to provide a clear picture of the change in the level and extent of NMD, and its influences over the periods 2008 to 2010. It can be seen from the Fiji perspective that the mandatory requirements tend to have a financial focus. However, it would be expected that the level of company disclosures would have changed over time, with not only global market forces but through differing societal values which have increased the frequency and demand of non-mandatory reporting by companies. All companies showed some degree of NMD, and on average this demonstrates an increasing trend. The stakeholders are receiving more information about a company’s activities. The companies were analysed in light of recent developments in corporate governance by the Capital Markets Development Authority (CMDA) implementing their 10 corporate governance principles. This became a major driver of the increase in NMD levels of the disclosures in the annual reports of the listed companies. However, a large variation still exists between the level and extent of the NMD and the different listed companies. The minimum disclosure level found over the three years was 9.09 percent, which has increased to a minimum of 13.66 percent in 2010, and the maximum disclosure level over the three years was 81.82 percent. The findings for the extent of NMD was also similar where the minimum words used in NMDs was 114, increasing to 854 in 2010, and the maximum disclosure extent over the three years was 21,414 words. However, it was found that the measurement of counting words tended to fluctuate over different periods where significant events took place that affected the company. Therefore, it was established that disclosure is impacted by what happens in the reporting period, and can explain why one period may have greater disclosure than another. The paper aims to extend earlier work of Sharma & Davey (2013) on the extent of NMD in Fijian context. While Sharma & Davey (2013) considered voluntary disclosure from 1999-2005, our study reviews NMD over 2008-2010. The study has shown that corporate governance code issued in 2009 by Capital Market Development Authority has influenced the level of NMD