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Managing Reputation: Evidence from Biographies of Corporate Directors

55 Pages Posted: 12 Oct 2016  

Ian D. Gow

Harvard University - Accounting & Control Unit

Aida Sijamic Wahid

University of Toronto - Accounting; University of Toronto - Rotman School of Management

Gwen Yu

Harvard Business School

Date Written: October 10, 2016

Abstract

We examine how corporate directors manage reputation through disclosure choices in biographies in proxy statements filed with the SEC. Directors are more likely to withhold information about directorships at firms that experienced adverse events. Withholding such information is associated with more favorable stock price reactions at appointment and loss of fewer subsequent directorships. Non-disclosure of directorships is significantly reduced following changes to SEC rules, with the greatest change being for adverse-event directorships. These findings suggest that reputation concerns of corporate directors lead to strategic disclosure choices that have real consequences in both capital and labor markets.

Keywords: Director monitoring, reputational concerns, strategic disclosure

JEL Classification: M4, G3, G14

Suggested Citation

Gow, Ian D. and Wahid, Aida Sijamic and Yu, Gwen, Managing Reputation: Evidence from Biographies of Corporate Directors (October 10, 2016). Available at SSRN: https://ssrn.com/abstract=2850576

Ian D. Gow

Harvard University - Accounting & Control Unit ( email )

Soldiers Field
Boston, MA 02163
United States
6174956530 (Phone)

Aida Sijamic Wahid

University of Toronto - Accounting ( email )

105 St George St
Toronto, ON M5S 3E6
Canada

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Gwen Yu (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 383
Boston, MA 02163
United States

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