IS BOARD STRUCTURE ONE-SIZE-FITS-ALL? THE UNINTENDED INFORMATIONAL CONSEQUENCE OF THE SARBANES-OXLEY ACT
In this paper we examine how board structure affects the informativeness of board members by comparing the returns earned by officers and independent directors from purchasing the firm’s stock. We investigate whether an exogenous shock to the board structure – the 2002 Sarbanes- Oxley Act and the related mandates – leads to a shift in information asymmetry between officers and independent directors. We find that improvement in board’s information environment is limited to firms whose boards are previously controlled by outsiders. By contrast, information asymmetry rises among firms whose boards are previously dominated by insiders: An increase in independent directors is followed by a significantly larger difference in buy-and-hold returns between officers and independent directors. In addition, the increase in information asymmetry is associated with deteriorating operating performance for these firms.
Sarbanes-Oxley Act information asymmetry insider trading board structure and composition directors corporate governance
Huijing Fu Xiaoyun Yu
Accounting Department, Neeley School of Business, Texas Christian University,TCU Box 298530, Fort Wo Department of Finance Kelley School of Business Indiana University
国际会议
广州
英文
1-46
2009-07-07（万方平台首次上网日期，不代表论文的发表时间）