Disclosure and the quality of corporate governance system are more often appreciated as closely related concepts – the higher the level of transparency, the better the quality corporate governance practices. As regards disclosure, if in a widely held company (ownership dispersion) its role is to signal that the managers are acting in the best interests of the principals, in a highly concentrated company (ownership concentration), it comes to annihilate the conflicts of interest between “insiders” (controlling shareholders and managers) and outside investors.

Basing on this background, we focused on corporate governance disclosure, analyzing possible influences over it coming from corporate governance dimensions. Therefore, the objective of our paper is to identify possible associations between corporate governance features and the level of disclosure through annual reports in case of banking institutions listed at London Stock Exchange focusing on ownership concentration.

Most empirical studies that have tested the correlation between ownership concentration and the level of disclosure reached to a negative relationship (Barako et al., 2006; Tsamenyi, et al., 2007; Haniffa and Cooke, 2002; Huafang and Jianguo, 2007; Patelli and Prencipe, 2007; Chau and Gray, 2002; Cooke, 1989). However, there are also studies that could not find any association (Arcay and Vazquez, 2005; Ghazali and Weetman, 2006; Holm and Scholer, 2010; Parsa, et al., 2007; Baek, et al., 2009; Makhija and Patton, 2004; Depoers, 2000). Basing both on assertions supported by the agency theory that companies with concentrated ownership do not have to rely on external disclosures to the same extent as companies with dispersed ownership, as well as on most prior empirical findings that provide evidence in this respect, we proposed the following hypothesis:

“(H): There is a negative association between ownership concentration and the extent of disclosure”.

The research methodology used for achieving our goal is based on econometric analysis using statistical tools – correlations for identifying the relationships and regressions for assessing them – all of these being performed using SPSS software. In this respect, firstly, we developed a disclosure index made of three sub-indices, one for each type of disclosure: mandatory, recommended and voluntary.

The results of the performed analysis reveal significant negative influences of ownership concentration on the level of disclosure, thus confirming our assumptions that the extent of disclosure is negatively associated with ownership concentration. Thus we can assert that the higher the dispersion of shareholders, the higher the level of transparency, our results being consistent with some general prior literature findings on the same topic (e.g. Barako et al., 2006; Tsamenyi, et al., 2007; Haniffa and Cooke, 2002; Huafang and Jianguo, 2007; Patelli and Prencipe, 2007; Chau and Gray, 2002; Cooke, 1989).

Unlike prior research studies which were focused on similar goals – to test possible influences of corporate governance features over the level of corporate governance disclosure at companies level, our paper provides a particular approach on a specific business field, the banking one that was little explored on this topic before. Thus, we had the chance to enrich the research literature with this empirical study, whose disclosure index developed ensures it as well with originality.