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American Interdisciplinary Journal of Business 

and Economics 
ISSN: 2837-1909| Impact Factor : 4.6 

Volume. 9, Number 2; April-June, 2022; 

Published By: Scientific and Academic Development Institute (SADI) 

8933 Willis Ave Los Angeles, California 

https://sadipub.com/Journals/index.php/aijbe 

 

 

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ANALYSING THE RELATIONSHIP BETWEEN COVID-19 AND 

CORPORATE GOVERNANCE ON THE ISSUING DATE OF UK NON-

FINANCIAL FIRM'S ANNUAL REPORTS 

 

 
Rateb M. Alqatamin and Mohammad K. Shbeilat 

Accounting department, Faculty of Business, Tafila Technical University, Jordan 

 

Abstract: This study examines the relationship between corporate governance factors, the COVID-19 

pandemic, and the timing of annual reports by UK non-financial companies. The study is based on data from 

companies listed on the London Stock Exchange from 2008 to 2021, and it employs a panel regression random 

effect model to analyze the data. The study finds that there is a significant association between corporate 

governance factors such as board size, independency of board, audit independence, audit experience, and the 

timing of annual reports. Furthermore, the study reveals that the COVID-19 pandemic negatively affects the 

corporate governance mechanisms that enhance the timing of annual reports. The findings of this study are 

consistent with prior research indicating that the quality of financial reporting should be a focus of 

policymakers and managers to enable investors to take timely and informed decisions. Thus, timely 

submissions of financial reporting are vital for both external and internal users since they provide useful and 

updated information allowing them to make the right decisions. 

Keywords: Corporate Governance, Annual Reports, Financial Reporting, Board Size, Audit Independence. 

 

Introduction 

Timely submissions of financial reports are regarded as essential for external and internal users, allowing 

them to make informed decisions. A considerable body of literature has identified corporate governance as a 

potential factor that influences the issuing date of annual reports. The board of directors is responsible for 

issuing a company's financial annual reports, which are disseminated to the public. Several previous studies 

have investigated the relationship between the board of directors' characteristics and the timing of financial 

annual reports, but their findings are mixed. Hence, it is crucial to explore further how the corporate 

governance structure can impact financial reporting. Moreover, the COVID-19 pandemic has presented a 

significant challenge to corporate governance mechanisms that enhance the timing of annual reports. Given 

the unprecedented impact of the pandemic, it is essential to study the effect of COVID-19 on financial 

reporting. Therefore, this study aims to examine the relationship between corporate governance factors, the 

COVID-19 pandemic, and the issuing date of annual reports by non-financial UK companies. This study adds 

to the existing literature by providing empirical evidence of the relationship between issuing date of annual 

reports, corporate governance, and the COVID-19 pandemic. The study uses data from 2008 to 2021 and 

employs a panel regression random effect method to analyze the data. This study's findings can contribute to 

policymakers and managers' decision-making process by emphasizing the importance of the quality of 

financial reporting and timely submissions in enhancing transparency and accountability.   



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Literature Review  

The timeliness of submissions of financial reporting is considered vital for both external and internal users 

since it provides useful and updated information allowing them to make the right decisions (Gunarsih 2011; 

Beest et al. 2009). Furthermore, previous literature reveals that the issuing date of annual reports is influenced 

by corporate governance. With respect to the board characteristics, several studies have investigated the 

association between the board of directors and issuing date of annual reports and found a strong correlation 

exists as it is the board of directors with the authority to issue company’s financial annual reports and thus 

disseminated to the public. For example, Daoud et al. (2014a) investigated the relationship between the board 

of director’s characteristics and issuing date of annual financial reports among Jordanian listed companies. 

Their study concluded that firms with a smaller board size are willing to issue their financial reporting faster 

than those with a larger board. However, they fail to find evidence of independent directors and the timeliness 

of financial reporting. This result is in line with findings of Ibadin et al. (2012), who confirmed that there is 

no association between board independence and issuing dated of financial annual reports. Their results are 

consistent with the findings of Nelson and Shukeri (2011), who studied the effect of board independence on 

audit report timeliness among Malaysian listed companies; they failed to find any association between board 

independence and audit report timeliness. Similarly, Ibadin et al. (2012) studied the relationship between 

corporate governance characteristics and the timeliness of financial reporting among Nigerian companies. 

Their study shows that there is no relationship between board independence and the timeliness of financial 

reporting. Conversely, Dimitropoulos and Asteriou (2010) and Persons (2009) find that independent board 

members have a positive and significant effect on the timeliness of financial reporting. In addition, Abdullah 

(2006a),  by using the sample of Malaysian listed companies, examined the association between board of 

directors independence and timeliness of annual financial reports. His study documents a significant 

association between board of director independence and timeliness of financial reporting. Furthermore, Afify 

(2009) shows that board independence is significantly related to the timeliness of financial reporting. Odit 

(2015b) states that board diversity reduces the number of days before information is announced, which 

improves the timeliness of financial reporting. The results of the study recommended that the quality of 

financial reporting should be a focus of policymakers and managers to allow investors to take timely and 

informed decisions. This finding confirms the conclusions by Omoro et al. (2015), who found that gender 

diversity in top management increases financial reporting quality, including properness and accuracy of the 

information released. In a related to the audit committee characteristic,  Puasa et al. (2014) report that internal 

audit committee characteristics has an insignificant role in monitoring the issuing date of annual financial 

reporting process. For example, there is evidence showing that an independent audit committee is expected 

to be unbiased in achieving their responsibilities, whereas a lack of independence and autonomy within an 

audit committee has the potential to impact the shareholders’ best interests as the member act in a way which 

is self-serving, rather than for the overall benefit of the company. (Hashim and Abdul Rahman 2011; Fama 

and Jensen 1983). Abdullah (2006b) reveals that audit committee independence has a positive and significant 

association with the timeliness of financial reporting amongst Malaysian companies during the period 1998 

to 2000. The study’s results differed from those reported by Naimi et al. (2010), who fail to find any 

association between audit committee independence and issuing date of annual financial reporting. However, 

a study conducted by Hashim and Rahman (2011) reveals that audit committee independence and financial 

reporting timeliness are negatively and significantly related. These findings explain the power of independent 

audit committees in achieving their aims more effectively. Further, pervious literature has examined the 

relationship between audit committee size and financial reporting timeliness. Nelson and Shukeri (2011) 

reveal that the longer audit delay was negatively and significantly associated with audit committee size. 

However, it has been found that corporations that have larger audit committees in terms of personnel have 

more regular meetings and are therefore they are more likely to issue and publish timely audit reports (Naimi 

et al. 2010). Prior studies show that an audit committee member’s financial expertise positively and 



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significantly relates to financial reporting timeliness (Abernathy et al. 2014). This finding suggests that those 

audit committees that have financial expertise members are more likely to lead companies to disclose their 

financial information sooner than later. By using a sample of Tunisian listed companies, Oussii and Taktak 

(2018) conducted a study to investigate the association between audit committee efficiency and the issuing 

date of the annual financial reports. Their results show that audit committees with members who have a 

financial background are more likely to publish their annual reports faster. This finding suggested that 

members who have financial background contribute to the enhancement of issuing date of annual financial 

reports. Gunarsih (2011) studied the effect of ownership concentration by the domestic institutions on the 

timeliness of financial reporting among Indonesian companies listed in the Indonesian stock exchange during 

the period of 1999-2007. The result of the study shows that there is a positive relationship between corporate 

governance structure (ownership concentration by domestic institution) and issuing date of annual financial 

reports.  

Considering the COVID-19 pandemic studies, Šušak (2020) examines the relationship between financial 

reporting timeliness and earnings management practices. The study reveals that there is a positive relationship 

between earnings management and financial reporting delay during the COVID-19 pandemic, indicating that 

managers are more likely to engage in earnings management activities during the COVID - 19 pandemic. 

Grossi et al. (2020) investigated the impact and nature of budgetary responses to the COVID- 19 pandemic 

among United Kingdom public sector financial management. Their study shows that the pandemic period has 

had the greatest effect on the UK’s public finances in 2020-2021. Priede Bergamini et al. (2022) emphasise 

in their study how corporate governance practices can help companies survive during the COVID-19 

pandemic. The findings of the study reveal that companies subject to at least one of the corporate governance’s 

attributes, including board diversity, foreign investors’ independent directors, institutional ownership, and 

ownership concentration were more effective during the COVID-19 pandemic.  

In relation to the control variables, previous literature reported that the timeliness of financial reporting is 

influenced by company’s characteristics such as size, leverage, profitability, and industry (e.g. Ashton et al. 

1989; Cohen and Leventis 2013; Ismail and Chandler 2004; Al-Ajmi 2008; Afify 2009).  For example, a study 

conducted by Atiase et al. (1989) aims to examine  the effect of company’s size on the timeliness of financial 

reporting. The study found that large firms are more likely to report earnings faster than small companies. 

Furthermore, Davies and Whittred (1980) studied the relationship between selected companies’ 

characteristics and issuing date of the annual financial reports amongst Australian companies. They found 

that large and small companies are more likely to publish their annual financial reports faster than medium 

size companies. In addition,  Afify (2009) reveals that company’s size, leverage, profitability, and industry 

positively and significantly   affect the issuing date of annual financial reporting.   

Research Design  

3.1 Data and Sample  

Our sample period is from 2008 to 2021. We begin in 2008 since the corporate governance practices in the 

UK become mandatory from 2008; the most relevant data is obtained from annual financial reports. The initial 

sample included a total of 129 listed companies on the London Stock Exchange (LSE) and 1806 firm-year 

observations. We excluded 13 companies because those companies were not listed on LSE during the entire 

period of the current study; thus we deleted 182 firm-year observations from our initial sample. We then 

excluded 5 companies with 70 year-observations because they did not report the relevant information for this 

study. Therefore, the final sample includes 1554 observations to test the study’s hypotheses.   

3.2 Regression Model    

The current study used the following model to test hypotheses:  

AUDDALit = β0 + β1 BSIZit + β2 BOGENit + β3 BINDit + β4 BOMEETit + β5 AUDINDEit + β6 AUDSIZEit + 

β7 AUDEXPEit + β8 OWNCONit + β9 FSIZEit + β10 FPROFit + β11 FLEVERit + β12 FDIVIDit    Where:    



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AUDDAL=Audit daily, this figure represents the time that elapses in days between year-end and the date of 

the independent auditor's report for several UK companies as a proxy for financial reports timeliness. BSIZ= 

Board size, Total number of board director’s members. BOGEN = gender diversity of the board, percentage 

of female members on the board directors. BIND = Board independency, the proportion of independent 

directors to the total number of directors on the board directors. BOMEET = Board meeting measured by the 

number of board directors’ meetings held during the year. AUDINDE Audit = independency measured by the 

proportion of independent directors to total number of directors on the audit committee. AUDSIZE = Audit 

size measured by the total number of audit committee members. AUDEXPE = Audit experience measured by 

proportion of members with education/background in accounting or finance. OWNCON = ownership 

concentration which is the value of one if it is an external stakeholder who owns five per cent or more from 

the total firm’s outstanding shares; otherwise zero. FSIZE = Firm Size of a company generated by aggregate 

assets. FPROF = Firm Profitability which is measured by return on assets calculated by net income before 

tax divided by aggregate assets. FLEVER = Leverage ratio, which is calculated by divided the aggregate 

liabilities by aggregate assets. FDIVID = Dividends ratio measured by Cash dividends divided by net income 

for the same period. Table 1 demonstrated variables definitions and measurements.  

Table 1. Variable definitions and measurements  

Label  Variable  Description  

AUDDAL  Audit Daley  Measured by the time that elapses in days between year-

end and the date of the independent auditor's report for 

several UK companies.  

BOSIZE  Board Size  Total number of board directors’ members.  

BOGEN  Board Gender  Percentage of female members on the board directors.  

BOMEET  Board Meeting  Number of board directors’ meetings held during the 

year.  

AUDINDE  Audit independence  The proportion of independent directors to the total 

number of directors on the audit committee  

AUDSIZE  Audit size  Measured by the total number of audit committee 

members.  

AUDEXPE  Audit experience  

  

The proportion of members with education/experience in 

accounting or finance.  

OWNCON  Ownership concentration  
Which is the value of one if it is an external stakeholder 

who owns five per cent or more from the total firm’s 

outstanding shares; otherwise zero?  

FSIZE  Firm Size  Firm generated by aggregate assets.  

  

FPROF  Firm Profitability  
Measured by return on assets, the net income before tax 

divided by aggregate assets.  

FLEVER  Leverage ratio  

  

Aggregate liabilities divided by aggregate assets.  

  

FDIVID  Dividends Ratio  

Cash dividends divided by net income for the same 

period.  

Descriptive Statistics  

Table 2 sumarises the statistical properties of data used in this study in terms of observations, standard 

deviation, mean, coefficient of variation and median for all variables. This section reveals that the minimum 

value of audit delay is 22 days and the maximum value is 118 days with a 15.46 standard deviation, this 



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indicates a considerable distribution in the days. The mean value is 56.7487, which is similar to the results of 

Odit (2015a), who found that the average length of time in days before financial annual reports of  companies 

studied in Nairobi are released is 58.2799. With regard to the board size, it was found that the small board has 

5 members whereas the highest number of members was 17 members, it is surprising to note that, some UK 

firms ignore the UK corporate governance code number (21), which mentions that the number of board 

members should be no more than 15. This contravenes a section of the UK Corporate Governance Code 

number 21. With respect to the gender diversity of the board, the minimum value is 0 and the maximum value 

is .29 with stander deviation .23. In relation to the board independence and board meetings, the minimum 

values are .375 and 6, while the maximum values are .5487 and 22 respectively. In addition, Table 2 shows 

that zero is the minimum value of audit independency while the value of .3431 is the maximum value with 

standard deviation .2460 and mean value of .375. Descriptive analysis reveals that audit size and audit 

expertise have the minimum values of 3 and 1 and maximum values of 5 and .4812 respectively. Whereas, 

ownership concentration has a mean value of .869.  

Moreover, the coefficient of company size is widely distributed and ranges from 11.735 to 18.9268. Recording 

and analysis of profitability demonstrates that it varies between minimum values of 0.4816, which constitutes 

a loss, and a maximum value of 0.937, which indicates profit. There is a slandered deviation of 1.3297. 

Additionally, Table 2 indicates the leverage ratio ranges from 0.9531 and the mean value is 0.19726. The 

mean value of the dividends ratio is 0.2941, whereby the minimum is 0 and the maximum is 0.975 respectively 

with standard deviations of 0.2291.  Table 2. Descriptive analysis  

Variables  Observations  Minimum  Maximum  Mean  Std. Deviation  

AUDDAL  2109  22  118  56.7487  15.4692  

BOSIZE  2109  5  17  8 .9519  .4140  

BOGEN  

BOINDP  

BOMEET  

2109  

2109  

2109  

0  

.3751  

3  

.2964  

.5487  

22  

. 846  

.323  

8.7568  

.2305  

.5100  

4.8733  

AUDINDE  2109  0  .3431  .3753  .2460  

AUDSIZE  2109  3  5  1.8598  1.256  

AUDEXPE  2109  1  .4812  .3931  .2721  

OWNCON  2109  0  1  .9094  .4711  

FSIZE  2109  11.7355  18.9268  13.968  1.2997  

FPROF  2109  -.4816  .9377  1.3297  .08483  

FLEVER  2109  0  .9531  .19726  .3050  

FDIVID  2109  0  .9750  .2941  .22941  

Checking for Multicollinearity  

Two conventional methods to ensure instances of Multicollinearity are minimal have been employed 

extensively in the previous literature, which are correlating tolerance values with matric and variable inflation 

factors (VIF) (e.g. Abdel-Fattah, 2008). This study uses both to test whether the independent variables or the 

model suffer from Multicollinearity. Table 3 indicates the highest correlation, with a coefficient of 65% 

between the firm’s size and board meeting, which demonstrates that Multicollinearity is not an issue within 

this date set. Table 4 illustrates VIF coefficients of each independent variable. According to Gujarati (2003) 

when there is a VIF of less than 10, there cannot be a Multicollinearity issue. Table 4 shows that the maximum 

VIF is (1.68), and the mean is (1.14). 

Table 3. Pearson’s Correlation  



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Variab les  BOSI 

Z  

BOG 

EN  

BOIN 

D  

BOM 

EET  

AUDI 

NDE  

AUDS 

IZE  

AUDE 

XPE  

OWN 

CON  

FSI 

ZE  

FPR 

OF  

FLE 

VER  

FDI 

VID  

BOSIZ  1.000                        

BOGE 

N  

0.183 7  1.000                      

BOIN 

D  

0.026 4  -0.10 

30  

1.000                    

BOME 

ET  

0.001 7  -0.08 

14  

0.013 2  1.000                  

AUDI 

NDE  

-0.02 4  0.029 

4**  

-0.029 

5**  

-0.009 

9**  

1.000                

AUDS 

IZE  

-0.03 

71**  

0.206 

**  

0.037 2  0.050 

8*  

0.0780  1.000              

AUDE 

XPE  

0.028 5  0.082 2  0.271* 

*  

0.016 

7  

0.0910  -0.036 6  1.000            

OWN 

CON  

-0.03 

83  

-0.07 

17**  

-0.015 

7**  

-0.061 

8*  

-0.035 1**  0.114 7  -0.036 6  1.000          

FSIZE  0.264 4  0.439 5  -0.020 5  0.654 

2  

-0.042 0*  -0.045 6  0.1147  0.0607  1.00 0        

FPRO 

F  

0.096 3  -0.01 

52  

-0.123 1  -0.023 

9**  

0.0325 **  -0.012 0  -0.045 6  0.0134  0.05 

22  

1.00 0      

FLEV ER  0.007 1  -0.00 

63*  

0.002 

3**  

-0.040 

0*  

0.0440  -0.015 9  -0.012 0  -0.058 3  0.25 

34  

0.03 99  1.000    

FDIVI D  0.036 7  -0.06 

85  

0.017 6*  -0.009 

5**  

-0.049 3  0.009 3  -0.015 9  0.5297  -0.0 

475  

0.23 

564  

-0.50 

30  

1.000  

  

Table 4. VIF test results  

          

Variable     VIF     1/VIF   

BOSIZE     1.68     .677   

BOGEN     1.43     0.701338   

BOINDP     1.20     0.830574   

BOMEET     1.20     0.834394   

AUDINDE    1.10     0.909320   

AUDSIZE    1.10     0.909339   

AUDEXPE    1.09     0.913442   

OWNCON    1.09     0.913587   

FSIZE    1.06     0.945746   

FPROF    1.05     0.948349   

FLEVER    1.03     0.947968   

FDIVID    1.02     0.977192   

MEAN VIF      1.14     

Regression Analysis  

In this section, panel regression analysis has been used. Panel studies have previously been employed by 

practitioners, moreover, panel regression is recommended as an appropriate model for time series studies. It 

facilitates the removal of an unobservable heterogeneity amongst the sample.   



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The estimation confections of regression analysis in this study are shown in Table 5. The dependent variable 

is the timeliness of financial reports, while the independent variable is the corporate governance factors. As 

can be seen in Table 5, the finding reveals that the determination coefficient as measured by the values of 

adjusted R2 is 75.8%, the adjusted R2  show that the combination of independent variables used in the study 

model demonstrates 75.8% of the variation in the dependent variable.   

Also in Table 5 are the results of regression coefficients, which show the impact of corporate governance on 

the timeliness of financial reports. As expected, the regression results show that the coefficient of the BOSIZE 

is negative and significant (p < -0.043) related to audit delay as a proxy for the timeliness of financial reports. 

These results confirm that companies with large boards are more like to disclose their financial reports than 

companies with small board sizes. This result suggests that numbers of directors enhance corporate 

governance mechanisms among UK non-financial companies. This finding is consistent with previous studies 

(Krishnan, 2005). However, these results are inconsistent with a study conducted by Daoud et al. (2014b), 

who found that companies with smaller board sizes tended to issue their financial reporting faster than those 

with larger board size.  In related to the BOGEN, Table 5 shows that the coefficient is negative and significant 

(p < -0.023). The result, therefore, suggests that board gender diversity improves the timeliness of financial 

reporting. The results indicate that the level of monitoring ability of the board of directors is different based 

on their member’s gender. It is therefore taken that corporate governance aspects including gender diversity 

in the board have greater power in improving the timeliness of submitting financial reports. This finding 

confirms the conclusions by Liao et al. (2015) who found that gender diversity in top management increases 

financial reporting quality, including the properness of the information released. Furthermore, the finding of 

the current study indicates that BOINDP is positively and significantly associated with timeliness of financial 

reporting at the level of (p < -0.03). The findings of the study are consistent with Dimitropoulos and Asteriou 

(2010) and Persons (2009); these studies found that independent board members have a positive and 

significant effect on the timeliness of financial reporting. The implication is therefore that a company whose 

board contains a high percentage of outside directors is more likely to issue their financial reporting in a 

timely manner. This correlates with agency theory, suggesting that the independence of a board is determined 

by independent directors. However, Table 5 shows no significant relationship between BOMEET and 

timeliness of financial reporting; this finding confirms that strong corporate governance tools improve audit 

delay in the financial reporting processes and eventually increase the quality of financial reports. This result 

shows that AUDIND is positively and significantly associated with the timeliness of financial reporting at the 

level of (p < -0.007). This evidences that companies with high audit committee independence have a shorter 

audit report lag than companies with less independency audit committees. This finding is consistent with 

previous studies such as (Mohamad Naimi et al. 2010). With respect to the AUDSIZE, the current study found 

a significant relationship with the timeliness of financial reporting which is inconsistent with  Nelson and 

Shukeri (2011), who found negatively and significantly association between audit size and timeliness of 

financial reporting. Table 5 shows that audit committee expertise has a negative and significant relationship 

between AUDEXPE and the timeliness of financial reporting. This funding suggests that those audit 

committees who have members with financial expertise are more likely to lead companies to disclose their 

financial information sooner than later, which is consistent with the findings of (Odit 2015a).    

The coefficient of FSIZE is significantly and negatively related to the timeliness of financial reports (p < -

0.041). This finding indicates that large firms tend to disclose their financial reports faster than smaller 

companies. Consistent with the view that small size companies are subject to less supervision from authority 

and therefore, large companies made significantly more timely reports than small companies. This suggests 

that small companies have more motivation to issue their financial reporting faster than large companies. 

Concerning the coefficient of FPROF, there is a negative and significant relationship (p < 0.030) between a 

company’s profitability and the timeliness of financial reporting. None of the coefficients of FLEVER and 



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FDIVID statistically is significantly related to the timeliness of financial reporting, suggesting that these 

variables do not affect the issuing of financial reporting.  

Table 5. Regression Analysis  
  Predicted sign  Coeff.  t-stat.  P. Value  

Cons  +  .3289  2.58  0.054*  

  

BOSIZE  

 -    

-11.1491  

  

4.81  

  

0.043**  

BOGEN%  +  -.0518  -1.16  0.023**  

BOINDP%  +  .8681  3.31  0.031**  

BOMEET%  +  .0033  0.14  0.045*  

AUDINDE%  -  13446  2.68  0.007***  

AUDSIZE  +  -.33788  -0.75  0.451  

AUDEXPE%  ?  -12.004  -2.17  0.006***  

OWNCON%  ?  .06438  0.32  0.749  

FSIZE  +  -.0325  -0.94  0.041**  

FPROF%  ?  -.0330  -2.02  0.03***  

FLEVER%  ?  .0120  -0.03  0.59  

FDIVID%  ?  -.0075  0.53  0.61  

Adjusted R2  75.8%        

F-Stat.  17.62***        

*** Significant at the 0.01 level. ** Significant at the 0.5 level. * Significant at the 0.10 level.  

 
Additional Analysis  

Further analyses were performed to examine the effect of corporate governance structure on the timeliness of 

financial reporting of UK, non-financial companies during the period of the COVID-19 pandemic. The 

current study tests whether there is an effect of the COVID-19 pandemic on the relationship between corporate 

governance structure and the timeliness of financial reporting by splitting the sample into two groups based 

on the year: before the COVID-19 pandemic, and during the COVID-19 pandemic. The year 2019 has been 

used as a point cut.  To achieve this aim, the panel regression random effect method has been used. The 

estimation results of our random-effects panel regressions analysis are presented in Table 6 panels A and B, 

where A shows the period before the COVID-19 pandemic, and Panel B presents the results of the period 

during the COVID-19 pandemic. As can be noted from Table 6 panels A and B, overall R2 for both panels are 

64.6% and 68.3% respectively, relatively less than those of the primary analysis presented in Table 5. The 

constants are positively significant at level (p< 0.00).   

Table 6 panel A shows that the coefficient of BOSIZE is negatively and significantly (p < -0.052) related to 

audit delay as a proxy for the timeliness of financial reports. These results confirm that companies with large-

sized boards are more like to disclose their financial reports than companies with smaller board sizes. This 

result suggests that the volume of directors on a board enhances the corporate governance mechanism 

amongst UK non-financial companies. This finding is consistent with previous studies, such as (Krishnan, 

2005). It is also supported by the results reported in Table 5; while panel B shows that there is no effect 

between BOSIZE and the timeliness of financial reports. Furthermore, panel A indicates that BOGEN has a 

negative and significant relationship (p < -0.031) with timeliness of financial reports, which confirms the 

result reported in Table 5. The result, therefore, supports the idea that board gender diversity enhances the 

timeliness of financial reporting. The results indicate that the level of monitoring ability of the board of 

directors is different based on their members’ gender prior to the COVID-19 pandemic. It is, therefore, taken 

that aspects of corporate governance which include gender diversity in their boards have greater power in 



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improving the timeliness of submitting financial reports. This finding is consistent with previous results in 

Table 5. Moreover, the finding of panel A indicates that BOINDP is positively and significantly associated 

with the timeliness of financial reporting at the level of (p < 0.022, thereby consistent with our result reported 

in Table 5.  However, Table 6 panel A shows no significant relationship between BOMEET and timeliness of 

financial reporting. Similarly the result of panel A shows no effect of AUDIND and AUDSIZE on the 

timeliness of financial reporting In respect to the AUDEXPE, Table 6 panel A shows that audit committee 

expertise has a negative and significant relationship (p < -0.032)  between AUDEXPE and the timeliness of 

financial reporting. This finding suggests that those audit committees who have members with financial 

expertise are more likely to lead companies to disclose their financial information sooner than later. However, 

Table 6 panel B shows that corporate governance factors except BOINDP and BOMEET did not affect the 

timeliness of financial reports during the COVID-19 pandemic. These results confirm that the impact of 

COVID-19 appears significant in the relationship between corporate governance and timeliness of financial 

reporting.   In adition, these findings suggest that the board oversight role leads to reduction in uncertainty 

following COVID-19 pandemic.  

Table 6. Panel A. Association between corporate governance and the timeliness of financial reports before the 

COVID-19 pandemic.  

  Predicted sign  Coeff.  t-stat.  P. Value  

Cons  

  

+  

  

.3289  

  

2.58  

  

0.005*  

  

BOSIZE  -  -11.1491  4.81  0.052**  

BOGEN%  +  -.0518  -1.16  0.031**  

BOINDP%  +  .8681  3.31  0.022**  

BOMEET%  +  .0033  0.14  0.675  

AUDINDE%  -  13446  2.68  0.567  

AUDSIZE  +  -.33788  -0.75  0.451  

AUDEXPE%  ?  -12.004  -2.17  0.032***  

OWNCON%  ?  .06438  0.32  0.658  

FSIZE  +  -.0325  -0.94  0.041**  

FPROF%  ?  -.0330  -2.02  0.03***  

FLEVER%  ?  .0120  -0.03  0.59  

FDIVID%  ?  -.0075  0.53  0.61  

Adjusted R2  64.6%        

F-Stat.  16.87***        

*** Significant at the 0.01 level. ** Significant at the 0.5 level. * Significant at the 0.10 level.  

 
Table 6. Panel B. Association between corporate governance and timeliness of financial reports during the 

COVID-19 pandemic.  

  Predicted sign  Coeff.  t-stat.  P. Value  

Cons  

  

+  

  

.3289  

  

2.58  

  

0.026*  

  

BOSIZE  -  -11.1491  4.81  0.143  

BOGEN%  +  -.0518  -1.16  0.413  

BOINDP%  +  .8681  3.31  0.041**  

BOMEET%  +  .0033  0.14  0.025*  



Rateb M. Alqatamin and Mohammad K. Shbeilat (2022) 
 

19 
American Interdisciplinary Journal of Business and Economics | 

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AUDINDE%  -  13446  2.68  0.307  

AUDSIZE  +  -.33788  -0.75  0.451  

AUDEXPE%  ?  -12.004  -2.17  0.436  

OWNCON%  ?  .06438  0.32  0.749  

FSIZE  +  -.0325  -0.94  0.248  

FPROF%  ?  -.0330  -2.02  0.330  

FLEVER%  ?  .0120  -0.03  0.59  

FDIVID%  ?  -.0075  0.53  0.61  

Adjusted R2  24.3%        

F-Stat.  9.72        

*** Significant at the 0.01 level. ** Significant at the 0.5 level. * Significant at the 0.10 

level.  

 

Conclusions and Discussion   

The aim of the current study is to examine the effect of corporate governance structure on the timeliness of 

financial reporting of UK non-financial companies. This study provides empirical evidence that corporate 

governance mechanisms are statistically significant in influencing the timeliness of financial reporting. It has 

been demonstrated that better governed companies present more timely financial reports.   

To achieve this aim, further analysis was performed by splitting the sample into two groups based on the year, 

before the COVID-19 pandemic, and during the COVID-19 pandemic by using the year 2019 as a point cut. 

In general, the study’s findings show that there is a significant relationship between board size, board 

independency, audit independence, audit experience, and timeliness of financial reports. However, after 

splitting the study’s sample, the empirical results supported that the COVID -19 pandemic affected corporate 

governance mechanisms in a way that improved the timeliness of financial reports. We found that the COVID-

19 pandemic has affected all corporate governance attributes except board independence and board meetings, 

but not at a significant level as the difference between before and after COVID-19 among UK listed 

companies. There was limited empirical data prior to this study and therefore, to the best of our knowledge, 

this study is amongst the first to examine the influence of COVID-19 on the correlation between the timeliness 

of financial reporting and corporate governance. It can therefore be concluded that corporate governance and 

controls are associated with the levels of timeliness in reporting by UK listed companies. Whilst 

acknowledging its contribution to the limited literature in this field, the current study is not without 

limitations, since the results of this study just reflect characteristics of the UK companies. Hence, future 

studies may be focused on other markets. Second, a sample of this study includes only non-financial 

companies; future studies could be focused on financial companies. More research in this field will only 

further our understanding of the impact COVID-19 has had on financial reporting, its link to corporate 

governance, and the adequacy of these mechanisms in an unexpected and extraordinary event. There is limited 

empirical data on the scope of effect COVID-19 has had on different corporations. Further studies will need 

to consider a range of firm and country-level characteristics and the ways in which COVID-19 has influenced 

organization outcomes. There is a vast opportunity for further research in this field, for which this study can 

provide a foundation.  

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