The study of internal corporate governance mechanisms such as board characteristics plays a crucial role in explaining the variations in corporate governance and disclosure practices across firms. The effectiveness of such corporate governance mechanism in maintaining healthy relationship between the management and the shareholders depends significantly on board effectiveness. Two major attributes that affect a board’s effectiveness are board size and its composition. Board size refers to the total number of directors who sit on the board of a company, while board composition refers to the type of directors on the board. This paper focuses on this aspect and identifies the relationship between board characteristics, i.e., board size and board composition and corporate governance and disclosure practices of firms listed in the Bombay Stock Exchange (BSE).

Corporate governance is not just about the process but it is also about the way firms are held accountable mainly via ‘financial reporting’. Disclosure of timely, accurate and relevant information, enables the shareholder to evaluate the management’s performance by observing, how efficiently the management is utilizing the firm’s resources in the interest of the principal (shareholder). Investors have higher confidence in firms with good corporate governance. Increased public interest in corporate transparency is also reflected in recent corporate governance regulations that have been introduced by stock exchanges and regulators worldwide. Thus, market regulators enact numerous rules and codes to ensure timely and accurate disclosure of information by listed firms.

Given the relevance that corporate governance information has for capital markets, it is evident that companies should adopt such corporate governance codes and reveal this information to contribute to the improvement of their transparency. As such corporate transparency refers to the disclosure of firm-specific information to outside constituents of the firm and is an integral part of corporate governance practices. Corporate governance mechanisms can be considered as key factors explaining the level of disclosure by various firms. Thus, the study of internal corporate governance mechanisms such as board characteristics plays a crucial role in explaining the variations in corporate governance and disclosure practices across firms. This paper focuses on the important characteristics of board such as board size and board composition, as limited research has been undertaken to examine the association between internal corporate governance mechanisms and level of disclosure. Board size refers to the total number of directors who sit on the board of a company, while board composition refers to type of directors on the board.

Corporate Governance Journal, Bombay Stock Exchange (BSE), Securities Exchange Board of India (SEBI), Board Characteristics, Corporate Governance, Disclosure Practices, Firms, Indian Stock Exchange.