INTERLOCKED BOARDS OF DIRECTORS, CORPORATE GOVERNANCE, AND EARNINGS QUALITY

Justin Mindzak

《Advances in Quantitative Analysis of Finance and Accounting》 19期 (2022/12) Pp. 287-327

https://doi.org/10.6293/AQAFA.202212_(19).0008

摘要

This paper studies the effects of interlocked boards of directors on voluntary governance disclosures, governance practices, and earnings quality. The Canadian environment, where director interlocks are prevalent, is examined. A checklist of 20 voluntary disclosure measures from proxy statements is developed and a direct measure of interlocking directorships is employed. I find that interlocked boards of directors are negatively associated with voluntary governance disclosures and positively associated with earnings quality. From an accounting perspective, greater earnings quality provides evidence that regulator rules and policies limiting interlocks may be unnecessary.

關鍵字

Board Interlocks ； Corporate Governance ； Voluntary Disclosures ； Earnings Quality

參考文獻

Abbott, L. J., Parker, S., & Presley, T. J. (2012). Female board presence and the likelihood of financial restatement. Accounting Horizons, 26, 607-629. doi:10.2308/acch-50249

Baginski, S. P., Hassell, J. M., & Kimbrough, M. D. (2002). The effect of legal environment on voluntary disclosure: Evidence from management earnings forecasts issued in U.S. and Canadian markets. The Accounting Review, 77, 25-50. doi:10.2308/accr.2002.77.1.25

Bebchuk, L., Cohen, A., & Ferrell, A. (2009). What matters in corporate governance? The Review of Financial Studies, 22, 783-827. doi:10.1093/rfs/hhn099

Bizjak, J., Lemmon, M., & Whitby, R. (2009). Option backdating and board interlocks. The Review of Financial Studies, 22, 4821-4847. doi:10.1093/rfs/hhn120

Borgatti, S. P., & Foster, P. C. (2003). The network paradigm in organizational research: A review and typology. Journal of Management, 29, 991-1013. doi:10.1016/S0149-2063_03_00087-4