Transparency

INTRODUCTION1

Recent financial international scandals have generated hyped interest in the area of corporate governance as a mean to mitigate financial problems faced in developing nations (Tsamenyi et al. 2007, Gugler et al. 2003, Rabelo and Vasconcelos 2002, Reed 2002, Ahunwan 2002). The financial problems faced by developing economies include weak and illiquid stock markets, government interventions, economic uncertainties, weak legal controls and investor protection, and frequent government intervention. In addition, developing nations suffer from poor performance, and large concentration of ownership (Tsamenyi et al. 2007, Rabelo and Vasconcelos 2002, Ahunwan 2002). This study aims to explore and evaluate the current status of corporate governance disclosure in Egypt.

Many researchers have examined the status of corporate governance in developed nations. However, developing nations have not enjoyed such level of investigation. There is a need for understanding the interaction of corporate governance in the developing nations. Globalization, international trade, and international investment practices calls for the development of corporate governance in developing nations (Reed 2002). In addition, Rabelo and Vasconncelos (2002) reports the presence of differences between the factors giving rise to corporate governance in developing nations than those in developed nations. Developing nations are known to have different political and economic environments than those of the developed nations. They usually suffer from state ownership of companies, weak legal and judiciary system, weak institutions, limited human resources capabilities, and closed/family companies (Mensah 2002, Young et al. 2008).

Rabelo and Vasconcelos (2002) report that the special problems faced by developing nations makes the type and degree of corporate governance in developing nations significantly different from that in developed nations. In addition, it is reported that special issues like dominance of government ownership and/or family/closed companies makes corporate governance implementation questionable and troublesome (Mensah 2002).

In addition, individual developing countries are very different between themselves. There are major difference in the Middle East, North Africa countries and sub-Saharan African countries (Euromoney 2007, Fawzy 2004). Therefore, there is a need to study corporate governance in each country separately.

Egypt has adopted several far-reaching measures aimed at improving the local investment environment. Among these measures, Egypt engaged in a number of activities aimed at improving its corporate governance practices, in the late 1990s. It has been recognized that if applied properly, corporate governance helps countries to realize high and sustainable rates of growth. When practiced widely, good practices in corporate governance disclosure boost investor confidence in a country's economy, deepen capital markets and increase the ability of a country to mobilize savings and raise investment rates. Corporate governance disclosure facilitates access to a wider pool of investors by helping to protect the rights of minority shareholders and small investors. It also encourages the growth of the private sector by supporting its competitive capabilities, helping to secure financing for projects, generating profits, and creating job opportunities (Fawzy 2003).

The perceived importance of corporate