Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7414908 | China Journal of Accounting Research | 2018 | 37 Pages |
Abstract
Using novel data on independent directors' opinions in China, we investigate the stock and labor market effects prompted by independent directors publicly saying “no” to major board decisions. We find that the market reacts negatively to modified director opinions, but positively to firms interlocked with the directors who said “no.” We further find substantial turnover and decline in board seats after independent directors issue modified opinions. Overall, we identify a dilemma in China whereby the labor market does not reward vigilant directors for standing up to firm insiders, although investors add a premium to effective board monitoring.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Jun Du, Qingchuan Hou, Xuesong Tang, Yiwei Yao,