This study examines how non-state shareholder governance affects the authenticity of internal control information disclosure (ICID) in Chinese state-owned enterprises (SOEs). Using panel data on A-share SOEs from 2012 to 2023, the results show that appointments of directors, supervisors, and senior executives by non-state shareholders are associated with lower authenticity of ICID, with director appointments having the strongest effect. Robustness checks using propensity score matching confirm the reliability of these findings. Further analysis indicates that the negative association holds in uninsured firms but disappears in insured firms, suggesting that directors’ and officers’ liability insurance (D&O insurance) may enhance oversight and offset adverse reporting incentives. The study contributes to research on corporate governance and disclosure by showing that governance influence through key appointments shapes internal control reporting quality and that D&O insurance may condition the outcomes of mixed-ownership reforms. The results also carry policy implications for aligning governance rights with accountability to improve the credibility of ICID in SOEs.
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