While a considerable amount of research has already been carried out into the
corporate governance determinants of non-financial risk disclosure in companies in
the private sector, such determinants in the annual reports of listed Governmentowned
Companies (LGCs) have yet to be investigated fully. This study attempts to
complete the picture. Italian LGCs have been selected for analysis and agency
theory has been applied in the public sector under the accountability paradigm. The
research investigates whether non-financial risk disclosure provided in the
Management Commentary (MC) of Italian LGCs may be affected by ownership
concentration, corporate governance mechanisms and company-specific features.
The issue is of particular importance in a country where Government intervention
has significantly affected its economic development since the nineteenth century.
Our findings show that there is a relationship between the level of non-financial
risk disclosure and Board diversity, leverage and sector. Our findings also reveal
some useful insights concerning policy makers and standard setters.