Are all outside directors created equal? Do they differ in their governance roles? Evidence from voluntary disclosures of biotechnology firms

Enache, Luminita

Are all outside directors created equal? Do they differ in their governance roles? Evidence from voluntary disclosures of biotechnology firms

Date

2017-08-30

Authors

Enache, Luminita

Abstract

Empirical evidence on the association between outside directors and firms’ voluntary disclosures is mixed and controversial. We hypothesize that the outside directors do not represent a homogeneous group of people as previously considered in the literature. An outside director’s professional expertise and experience could shape her assessment of costs and benefits of disclosures as well as the investors’ demands for disclosures. Using hand-collected data from a sample of biotechnology firms, we find that the aforesaid association differs based on directors’ professional backgrounds. Thus, the outside directors must be distinguished from each other based on their professional backgrounds vis-à-vis their corporate governance roles. Our study has policy implications

Description

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Keywords

Biotechnology firms, Corporate governance, Voluntary disclosures, Proprietary costs

URI

http://hdl.handle.net/10125/51943

Collections

09 Financial: Manager Ability / Financial Analysts / Disclosure (FAR1)

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