HCBE Faculty Articles

Title

Corporate Reporting Transparency, Board Independence and Expertise, and CEO Duality

Document Type

Article

Date

4-1-2013

Publication Title

International Journal of Management Accounting Research

ISSN or ISBN

2163-3843

Volume

3

Issue

1

First Page

47

Last Page

72

Description

Compared to audit committee composition, relatively little research has been devoted to analyzing the role board composition and having one person serve as the CEO and chairman (CEO duality) play in improving corporate reporting transparency. My results indicate that after controlling for audit committee composition, board composition and CEO duality are related to various measures of corporate reporting transparency. I find that greater insider participation on the board (regardless of level of financial expertise) is related to less transparent disclosures, especially those related to board and management structure and processes. Independent directors, particularly those with financial expertise, are related to more transparent disclosures, especially those related to ownership structure and investor rights and board and management structure and processes. Finally, having different people serve as CEO and chairman of the board is not related to greater corporate reporting transparency. These results indicate that limiting insider participation on boards while encouraging the addition of independent financial experts to boards may improve corporate reporting transparency, but splitting the role of CEO and chairman may not.

DOI

10.2139/ssrn.1373942

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