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Full-Text Articles in Business
Does Institutional Ownership Affect Information Sharing With Independent Board Members?, Deborah D. Smith, Heidi H. Meier, Pervaiz Alam
Does Institutional Ownership Affect Information Sharing With Independent Board Members?, Deborah D. Smith, Heidi H. Meier, Pervaiz Alam
Business Faculty Publications
Research Question This is an investigation of board independence to determine whether management shares information with the board, or withholds information to retain autonomy. A key contribution is to examine the interaction of institutional ownership with the main test variables to determine whether institutional governance influences the information environment as board independence is increased. Research Findings The results show that information asymmetry decreases internally and increases externally as board independence increases, yet institutional ownership appears to moderate or reverse this relationship. The following variables are used to explain why managers of firms are likely to have more information than outsiders: …
Corporate Governance: Avoid The Groupthink Pitfall, Themin Suwardy
Corporate Governance: Avoid The Groupthink Pitfall, Themin Suwardy
Research Collection School Of Accountancy
Consensus due to similar personal backgrounds, lack of diversity in views and failure to see things from others’ perspective can lead to bad decisions.
Insider Ownership And Financial Analysts’ Information Environment: Evidence From Dual-Class Firms, Arno Forst, Barry Hettler, Ran Ron Barniv
Insider Ownership And Financial Analysts’ Information Environment: Evidence From Dual-Class Firms, Arno Forst, Barry Hettler, Ran Ron Barniv
School of Accountancy Faculty Publications and Presentations
We examine the association of insider ownership with financial analysts’ forecast accuracy and dispersion in a sample of U.S. dual-class firms. Insider ownership exerts two effects: a positive incentive effect and a negative entrenchment effect. The lack of significant findings in prior research regarding the association between insider ownership and forecast accuracy may be attributable to the offsetting forces of these two effects. Using a comprehensive hand-collected sample of U.S. firms that maintain more than one class of common stock, we are able to disentangle incentive and entrenchment effects which are confounded in single-class firms. We find that disproportionate insider …
Business Education Of Ceo-Cfo And Annual Report Readability, Ling Tuo, Yu (Tony) Zhang, Zhenfeng Liu, Ruixue Du
Business Education Of Ceo-Cfo And Annual Report Readability, Ling Tuo, Yu (Tony) Zhang, Zhenfeng Liu, Ruixue Du
Accounting Faculty Publications
Financial report readability captures the transparency and effectiveness of information communicated by firms’ executives. It’s interesting to investigate whether business knowledge, cognitive preferences, and professional ethics taught by a business education will shape the CEO/ CFO’s thinking in determining words, languages, paragraphs, and contents presented in financial reports when the self-interested CEO/CFO tends to influence the interpretation of financial information users. Using a sample of S&P 1500 CEOs and CFOs, we find that the CEO (CFO) with a business degree is associated with better (worse) readability of annual reports and the positive (negative) relation is strengthened (moderated) by internal corporate …
Not Clawing The Hand That Feeds You: The Case Of Co-Opted Boards And Clawbacks, Sterling Huang, Chee Yeow Lim, Jeffrey Ng
Not Clawing The Hand That Feeds You: The Case Of Co-Opted Boards And Clawbacks, Sterling Huang, Chee Yeow Lim, Jeffrey Ng
Research Collection School Of Accountancy
We examine how board co-option, defined as the fraction of the board comprising directors appointed after the CEO assumed office, is related to clawback adoption. We find that co-opted boards have a lower probability of adopting clawback provisions. Further, the negative association between board co-option and clawback adoption is more pronounced when at least one co-opted member is on the compensation committee and when there is a higher likelihood that a clawback provision will be triggered. Finally, we find that board co-option is an important mechanism through which longer-tenured CEOs reduce the likelihood of clawback adoption.