کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
960576 | 929501 | 2007 | 31 صفحه PDF | دانلود رایگان |
![عکس صفحه اول مقاله: Financial fraud, director reputation, and shareholder wealth Financial fraud, director reputation, and shareholder wealth](/preview/png/960576.png)
We investigate the reputational impact of financial fraud for outside directors based on a sample of firms facing shareholder class action lawsuits. Following a financial fraud lawsuit, outside directors do not face abnormal turnover on the board of the sued firm but experience a significant decline in other board seats held. This decline in other directorships is greater for more severe allegations of fraud and when the outside director bears greater responsibility for monitoring fraud. Interlocked firms that share directors with the sued firm also exhibit valuation declines at the lawsuit filing. Fraud-affiliated directors are more likely to lose directorships at firms with stronger corporate governance and their departure is associated with valuation increases for these firms.
Journal: Journal of Financial Economics - Volume 86, Issue 2, November 2007, Pages 306–336