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The University of Southampton
Centre for Risk Research

Impact of National Culture on the Risk Reporting Transparency of European Banks Event

Oluwaseun Osituyo
Time:
13:00
Date:
7 June 2018
Venue:
Room 4005, Building 4, Highfield Campus

Event details

Centre for Risk Research Seminar with Speaker Oluwaseun Osituyo

Abstract:

Over the years, there have been conflicting views on the direction of the relationship between national cultural dimensions and risk reporting practices. Although the influence of national culture on risk disclosure has previously been examined in non-financial firms, I will present the first study that has examined this relationship in the banking sector. Specifically, I examined the extent to which national cultural values affect risk reporting transparency in European banks. Using voluntary disclosure theory to explain risk reporting transparency, I conducted a longitudinal analysis of risk information in the annual reports of 30 large European banks and compared these to the negative events that actually occurred following the release of these annual reports. I then examined how these risk reporting practices related to the national cultural dimensions of uncertainty avoidance, power distance and long-term orientation. My results showed that uncertainty avoidance was significantly and negatively related to risk disclosure transparency and, surprisingly, that power distance was positively and significantly related to risk disclosure transparency. Among the control variables, I also found that listing on the New York Stock Exchange (NYSE) was positively related to transparent risk reporting. These findings show that when studying the risk reporting practices of banks, it is important to understand how national cultural traits can lead to differences in the way that banks report and predict negative future events. Additionally, I suggest that most countries would benefit from embracing more open regulations because this should encourage banks to be more focused on managing and reporting risks of potential significance.

Speaker Biography:

Oluwaseun Osituyo is a PhD student at Southampton Business School. She is researching risk disclosure practices in the banking industry and is supervised by Dr Oliver Marnet and Dr Ian Dawson.

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