Voluntary disclosure is the provision of information by a company's management beyond requirements such as generally accepted accounting principles and Securities and Exchange Commission rules,[1][2] where the information is believed to be relevant to the decision-making of users of the company's annual reports.
[3] The extent of voluntary disclosure is also affected by the firm's corporate governance structure[3][4] and ownership structure;[4] in particular, research has found that top executives have a significant influence on their firms' voluntary disclosures, and that managers have unique disclosure styles related to their personal backgrounds including their career paths and military experience.
[5] Voluntary disclosure has also been identified as an important area in financial reporting research.
[6] Voluntary disclosure benefits investors, companies and the economy; for example, it helps investors make better capital allocation decisions and lowers firms' cost of capital, the latter of which also benefits the general economy.
[7] Voluntary disclosure is also affected by shareholder demands; for example 60 percent of the companies on the S&P 100 adopted voluntary disclosure policies in response to shareholder demand for information on corporate political spending.