International Journal of Managerial Studies and Research (IJMSR) Volume 6, Issue 11, November 2018, PP 116-127 ISSN 2349-0330 (Print) & ISSN 2349-0349 (Online) http://dx.doi.org/10.20431/2349-0349.0611012 www.arcjournals.org International Journal of Managerial Studies and Research (IJMSR) Page |116 Corporate Governance and Disclosure Quality: Evidence from the Listed Non-Financial Firms of Pakistan Syed Usman Qadri 1* , Ye Chengang 2 , Muhammad Farooq Jamil 3 , Safwan Qadri 4 1 Business School, University of International Business and Economics, Beijing, China 2 Professor, Department of accounting, Business school, University of International Business and Economics, Beijing, China 3 Capital University of Science and Technology, Islamabad, Pakistan 4 School of Political Science and Public Administration, Wuhan University, China 1. INTRODUCTION Corporate governance is the scheme of mechanisms, procedure, rules and practices by which corporations are controlled and directed. It also provides the framework for attaining a company's objectives. Berle et al. (1932) and Jensen et al. (1976) come up to the view that corporate governance is assumed to be a fundamental stress between shareholders and corporate managers. Company must follow all the rules, regulations and requirement of the disclosure set by the Securities and Exchange Commission’s in order to be listed on major stock exchanges. Ross (1973) describes agency theory in his classical article stated as “The Economic Theory of Agency”. Then the theory was properly described by Jensen and Meckling (1976) as principal problems. Companies with good corporate governance also tend to reduce the agency problems between shareholders and managers of the firm and provide long term advantage to the investors and shareholders. Disclosure is the significant mechanism of corporate governance. Wallace and Naser, (1995) raise the point that financial disclosure is an abstract concept and can be measured directly. Companies must disclose good and bad information for fair investing process for the investors. Forker (1992) investigates the link between corporate governance and disclosure quality. The studies found the negative relationship between board size and disclosure quality. Khoshbakht and Mohammad Zadeh Salteh (2011) examine the alliance between the corporate governance mechanisms and the flexible disclosure information in Iranian listed firms over the period from (2002 to 2009). The study found significant relation with the optional disclosure of information and observed insignificant relation between ownership concentration and discretionary disclosure of information The Companies with good corporate governance also tend to reduce the agency problems between shareholders and managers of the firm and provide long term advantage to the investors and Abstract: This study intends to investigate the relationship between corporate governance and disclosure quality. The study uses disclosure index to find out the firm’s disclosure quality. For this purpose a sample of eighty firms listed on Karachi Stock Exchange (KSE) for the period of ten years i.e. 2005 to 2014 has been considered. Corporate governance variables tested for this study are the audit committee independence, board size, board independence, CEO duality, family ownership, institutional ownership. To measure the disclosure quality of the individual firms, the study has used the index score and it is checked against the information disclosed in the annual reports. Panel data estimation models have been employed for the purpose of analysis. The results reveal that better disclosure quality of the annual reports in non-financial sector can be achieved by having higher proportion of independent non-executive directors, separate board leadership structure, larger board size, higher the institutional ownership and lower ownership by family members in case of Pakistan. Keywords: Disclosure Quality, Ceo Duality, Audit Committee Independence, Board Size, Board Independence. *Corresponding Author: Syed Usman Qadri, Business School, University of International Business and Economics, Beijing, China