Beyond Compliance: A Conceptual Framework for Strategic Corporate Risk Disclosure

Abstract

The concept of the corporate risk disclosure (CRD) as more than mere regulatory compliance is growing among the stakeholders. It is an essential for stakeholder communication and strategic differentiation tool. Hence the disclosure must be informative. This conceptual paper challenges the dominant belief that the volume of disclosure is the same as the quality of disclosure. This paper developed the Strategic Risk Communication Framework (SRCF) as guide for CRD, utilising institutional theory, stakeholder theory, and organisational capability theory. This paper also delineates five dimensions of effective Corporate Risk Disclosure (CRD) which are strategic integration, institutional capability, forward-looking orientation, multi-stakeholder communication, and governance authenticity. The framework redefines CRD as an organisational capability requiring institutional infrastructure, rather than merely an information production process. By theorising CRD as a governance process, the framework moves beyond “board structure fetishism” and compliance traps, instead emphasising board processes, authentic accountability, and multi-stakeholder engagement. The paper develops a set of testable propositions and research directions that link disclosure capabilities to firm performance, legitimate outcomes, and stakeholder satisfaction. Contributions are threefold: (i) extending corporate governance theory by conceptualising disclosure as a capability rooted in governance authenticity, (ii) reframing stakeholder theory towards communication processes and legitimacy construction, and (iii) offering a practical diagnostic tool for boards, regulators, and investors.