Corporations may focus their financial reports disclosures on financial performance, and fail to address other aspects of corporate performance sufficiently (for example, nonfinancial performance disclosures). This might concern govemments and investors in capital markets because studies indicate that nonfinancial information like corporate governance and environmental impact affects management behaviour and investment decisions. One way of dealing with this concern is through regulating corporate reporting (Bushman and Landsman, 2010-. Therefore, govemments may decide to introduce legislations that will require corporations to provide such information.

(a) Critically discuss the rationale for the government introducing specific disclosure legislations on corporate govemance and environmental impact of corporations operations. (b) Explain who will benefit (and how), in the long run, from the disclosure legislations on (0 corporate governance and (ii) the environmental impact of corporations operations. (c) Critically assess the prospects of increased corporate accountability in matters of corporate govemance and the environment because of introducing the specific disclosure legislations in (b). In addressing the essay requirements, you are expected to use the three main theories of regulation. In addition, you are