recent years further strengthen thi

recent years further strengthen this point of view (Qu and Leung, 2006). In order to
build good corporate information disclosure system, companies are encouraged to
voluntarily disclose all the information that may have a material effect on the decision
for shareholders. The proportion of independent directors on board may affect the
level of voluntary information that company disclosed. Thus, we suggest there is
some link between board composition and voluntary disclosure in Chinese companies.
Compared with China, the quality of accounting rule is high in Sweden which means
transparency in Swedish Company is high as well and they disclose more information
in annual reports. When it comes to board, Swedish guidelines emphasize the main
duty of the board is to improve shareholder’s interests and maximize shareholder
value. This guideline, however, convey greater need for non-executive director
representation in particular as firm size increases; meanwhile it makes
recommendations on the size of the board. According to Törnqvist (1999),
Multinational corporations have a particular important motivation for voluntary
information disclosure is that more policy and future-oriented information may better
influence investors in the context of growing globalization of securities market,
therefore Sweden choose to reflect their strategic information as voluntary disclosure
in annual reports. Thus, the association between board composition and voluntary
disclose is highly expected in Swedish companies.
We choose Chinese and Swedish companies as our research aim comes from our
mutual interest. In the economy viewpoint, China’s booming economy makes us
interests on what kind of voluntary information they will present. China’s stock
market has been established since 1991, and it has developed rapidly as a booming
market. Stock market development in China appears advanced relative to the overall
level of economic development throughout the past two decades. The emergence and
development of China’s stock markets can be regarded as one of the major
achievements during China’s transition from a planned economy to a market economy.
Until the end of year 2007, China has 860 companies listed on Shanghai stock
exchange (SSE) market (China Securities Regulatory Commission, 2008). Compared
with Sweden, Stockholm stock exchange founded in 1863 and then it was acquired by
OMX in 1998 (wikipedia, 2008). According to information in OMX Nordic Exchange
Stockholm, there are 270 companies with 306 shares traded in the Stockholm stock
market as of July 18th, 2008 (OMX Nordic Exchange, 2008). In corporate governance
point of view, Swedish companies they have longer history of corporate governance
than Chinese companies. These two reasons for both economy and corporate
governance viewpoints drive us to examine the differences of the association of
voluntary disclosure between these two countries.
In our review, prior studies had investigated the association between board
composition and different types of voluntary disclosure among a variety of countries
and areas, such as Australia, Singapore, China, Hong Kong, etc. Most of previous
studies implied that more independent directors on the board disclosed more