Risk disclosure practices: Does institutional imperative matter?

IMPACT: This article will help government managers, regulators, and standard setters to improve risk management and disclosure in emerging economies. Evidence from in-depth interviews will guide government-owned banks in Bangladesh to effectively manage and voluntarily disclose risk management practices. The authors argue that legitimization might be a strategy for government-owned banks in pursuing to survive in the finance industry. ABSTRACT Government-owned banks in emerging economies commonly suffer from a lack of good governance, non-performing loans, undetected money laundering and other management malpractices. Managing and disclosing risks are significant issues for managers of government-owned banks. This article explores the managerial perception of risk disclosure by these government banks. Data were collected through in-depth interviews with 35 executives from government banks, government regulatory, and monitoring authorities. Institutional pressure, along with risk committees and board independence, are critical contributing factors for risk disclosure.