Corporate governance disclosure practices of private and government insurance companies in Ethiopia

Abstract Corporate governance plays a crucial role within the contemporary corporate regulatory framework, encompassing the transmission of information from a corporation to the public via several communication channels. This study investigated the corporate governance disclosure practices of Ethiopian insurance companies. A comprehensive set of secondary data spanning eight years was gathered from seventeen insurance companies. The data were sourced primarily from the annual reports of these companies, covering the period from 2015–16 to 2022–23. To evaluate corporate governance disclosure practices, a corporate governance disclosure index comprising 123 items was developed. This index was based on the OECD Principles of Corporate Governance, the corporate governance disclosure directives specific to Ethiopian insurance companies, and insights from the existing literature. The unweighted disclosure index is used to calculate the corporate governance disclosure index. This study employed descriptive statistics and an independent t-test to evaluate and compare the corporate governance disclosure practices of insurance companies. According to the results, the disclosure practices of insurance companies were poor but improved from 2015 to 2022. The analysis revealed that the average corporate governance disclosure level of Ethiopian insurance companies during this study was 57.15. In addition, the independent t-test results showed that there is no significant difference in corporate governance disclosure practices between private and government insurance companies. Overall, the insurance industry in Ethiopia has made progress in terms of disclosure practices. However, there is a need for improvement to ensure better transparency and accountability.