Supervisory board characteristics and accounting information quality: Evidence from China

- Study supervisory boards in China
- Study the characteristics of supervisors and accounting information quality
- Accounting or academic background, compensation and female members are drivers.
- Our results are robust to earnings response coefficient and discretionary accrual.
- Regulators can use the results to improve supervisory boards.

Using hand-collected data on the personal characteristics of supervisory board members, we study the relation between these characteristics and the accounting information quality of firms in China. Our results suggest that supervisors with an accounting or academic background, supervisor compensation, and female supervisors are consistent drivers of improvements in accounting information quality in China. Our conclusions are robust to earnings response coefficient and discretionary accrual approaches to measure accounting information quality. Chinese regulators and policy advisers can leverage our findings to improve the performance of supervisory boards in the two-tier corporate governance system in China.