Please use this identifier to cite or link to this item: https://doi.org/10.1016/j.jaccpubpol.2012.11.003
Title: Director capital and corporate disclosure quality
Authors: Reeb, D.M. 
Zhao, W.
Issue Date: Jul-2013
Citation: Reeb, D.M., Zhao, W. (2013-07). Director capital and corporate disclosure quality. Journal of Accounting and Public Policy 32 (4) : 191-212. ScholarBank@NUS Repository. https://doi.org/10.1016/j.jaccpubpol.2012.11.003
Abstract: Conventional wisdom regarding board effectiveness emphasizes the role of board composition and incentives in alleviating conflicts of interest. We argue that board capital, however, may be a more important aspect of board efficacy since directors are the highest level agents of shareholders, meet infrequently, and shareholders have limited recourse for poor decision-making. In contrast, shareholders and the SEC can sue/prosecute directors for conflicts of interest or bias. One role of the board involves determining the depth and degree of the firm's financial disclosures. To test the idea that high capital boards seek to provide greater disclosure quality to investors, we manually collect data on director attributes and apply factor analysis to measure the networking, educational, and experience capital of the board. The results indicate that board capital is positively related to disclosure quality, with differing key attributes for inside and outside directors. These results are robust to 2SLS and difference-in-difference approaches. © 2012.
Source Title: Journal of Accounting and Public Policy
URI: http://scholarbank.nus.edu.sg/handle/10635/114901
ISSN: 02784254
DOI: 10.1016/j.jaccpubpol.2012.11.003
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