Transparency and disclosure of information represent essential elements of a robust corporate governance framework as they provide a basis for informed decisions by shareholders and potential investors as well as other relevant stakeholders groups, dealing with the issues of capital allocation, corporate transactions and financial performance of firms. The importance of transparency and disclosure has been recognized by academics as well as practitioners, and over time this notion resulted in the introduction of a number of rules and regulations in order to ensure timely and reliable disclosure of (non)financial information as well as in the creation of standards which firms must comply to. This thesis aimed to achieve four objectives related to corporate reporting as a mechanism of corporate governance; (1) it presents a comprehensive theoretical framework in the field of corporate governance; (2) it analyzes the phenomenon of corporate reporting, with particular emphasis on the respective regulatory framework; (3) it analyzes the relationships between corporate reporting, capital market development, the quality of corporate governance and business activity; and (4) provides an insight into the actual situation and practice of corporate reporting in selected capital markets in the open and closed system of corporate governance.