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This paper aims to gauge the quality of risk disclosure in 3,872 annual reports of Indian corporates, using a risk disclosure index (RDI) developed to capture both quality and quantity of risk disclosures.

Focussing on 69 risk items, the paper uses manual textual analysis and scores risk items using an ordinal scale, as opposed to the general practice of using a dichotomous scale.

The average risk index is low, but greater in the post-recession period than in the pre-recession period. Most disclosures are qualitative, both backward and forward-looking, and exhibit a negative tone. In addition, company age and industry sector have a significant impact on disclosure levels.

The choice and weighting of semantic qualities used to construct RDIs used in disclosure studies are inherently subjective. This exploratory study uses univariate analysis and does not explore the reasons for poor disclosure.

In addition to its usefulness for investors and companies’ management, the findings of non-compliance with certain mandatory provisions and a low average RDI is particularly relevant for policymakers and regulatory bodies.

Development of a summary measure/RDI that is novel in its differential weighting of the semantic qualities pertaining to quantification, time-orientation and tone. Further, it serves as an exploratory study about risk disclosure practices in the Indian context that reveals notable differences from findings of previous risk disclosure research. Moreover, the study examines the relationship between firms’ age and risk disclosure levels, a largely ignored aspect in disclosure research.

The study aims to explore the unexplored domain by examining the impact of risk disclosure on corporate reputation in an emerging economy, like India, characterized by huge information asymmetry and uncertainty.

In total two measures of corporate reputation, i.e. market capitalization and excess of market value over book value have been deployed to measure reputation. Automated content analysis has been executed to measure the extent of total risk disclosure. The empirical analysis is premised on a sample of S&P BSE-100 index spanning over the period of ten years from 2009–2010 to 2018–2019; which eventually gets reduced to 58 nonfinancial firms. In order to unearth the risk–reputation relationship, a panel regression technique has been employed.

The main findings unmask that corporate risk disclosure has a positive bearing on corporate reputation. Substantiating legitimacy theory, its alternative measures like market capitalization and excess of market value over book value divulged to positively influence corporate reputation.

The study has certain limitations: since there is no standard method of measuring reputation, the results may vary subject to the changes in proxies of corporate reputation. The study also analyzed S&P BSE 100 index in India, and future research needs to approach a larger sample and in other emerging economies to fill up enough empirical evidence in this domain.

The findings provide insight into the managers on making higher divulgence of material risk information for augmenting corporate reputation. In other words, it indirectly propels the firm to exhibit higher risk information for building reputational capital. From the investor's standpoint, they should admire such firms which dispel more risk information and should have positive outlook toward them, which in turn prompts them to disclose more risks.

This study is unique as it is the first longitudinal study examining the impact of risk disclosure on corporate reputation in Indian settings. It, thus, assists in furthering the risk disclosure literature where there is hardly any study that comprehensively looks into risk–reputation liaison among Indian nonfinancial companies.