We take advantage of adopting a mandatory corporate governance disclosure system in Korean firms listed on KOSPI as a natural experiment to study the causal effects of the disclosure on firm risk. This paper first provides empirical evidence that a firm’s ESG performance, including corporate governance, affects the firm’s idiosyncratic risk and total risk. Such a risk-reducing effect of corporate governance is more pronounced among firms that report their compliance with corporate governance through mandatory disclosure. Our findings are robust even after controlling the endogeneity through instrumental variable analysis (IV-2SLS) and propensity score matching approach (PSM). Overall, these results imply that the mandatory disclosure intensifies corporate governance’s role in mitigating information asymmetry and thus reducing firm risk.