Financial Disclosure and the Board: A Case for Non-Independent Directors

Bologna Univ. Dept. of Economics Working Paper No. 689

29 Pages Posted: 27 Jan 2010

See all articles by Yuri Biondi

Yuri Biondi

French National Center for Scientific Research (CNRS)

Pierpaolo Giannoccolo

University of Bologna

Antoine Reberioux

Université Paris VII Denis Diderot; University Antilles Guyane - Faculty of Law and Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 20, 2010

Abstract

In listed companies, the Board of directors has ultimate responsibility for information disclosure. The conventional wisdom is that director independence is an essential factor in improving the quality of that disclosure. In a sense, this approach subordinates expertise to independence. We argue that efficient and effective certification may require firm-specific expertise, in particular for intangible-intensive business models. However, this latter form of expertise is negatively related to independence as it is commonly measured and evaluated. Accordingly, the paper develops a formalisation of this trade-off between independence and firm-specific expertise, arguing for an optimal share of independent directors for each company, negatively related to the degree of intangible resources and intangible drivers of performance.

Keywords: Board of directors, information disclosure, accounting, intangible resources, corporate governance

JEL Classification: G30, M21, D80, M41

Suggested Citation

Biondi, Yuri and Giannoccolo, Pierpaolo and Reberioux, Antoine, Financial Disclosure and the Board: A Case for Non-Independent Directors (January 20, 2010). Bologna Univ. Dept. of Economics Working Paper No. 689. Available at SSRN: https://ssrn.com/abstract=1540027 or http://dx.doi.org/10.2139/ssrn.1540027

Yuri Biondi (Contact Author)

French National Center for Scientific Research (CNRS) ( email )

IRISSO - University Paris Dauphine PSL
Place Marechal Lattre Tassigny
75016 Paris
France

HOME PAGE: http://yuri.biondi.free.fr/

Pierpaolo Giannoccolo

University of Bologna ( email )

Department of Economics
Piazza Scaravilli, 2
40125 Bologna, 40125
Italy

HOME PAGE: http://www2.dse.unibo.it/giannoccolo

Antoine Reberioux

Université Paris VII Denis Diderot

2, place Jussieu
Paris, 75005
France

University Antilles Guyane - Faculty of Law and Economics ( email )

Pointe à Pitre
France

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