Managing Reputation: Evidence from Biographies of Corporate Directors

54 Pages Posted: 12 Oct 2016 Last revised: 3 Oct 2018

See all articles by Ian D. Gow

Ian D. Gow

University of Melbourne

Aida Sijamic Wahid

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

Gwen Yu

University of Michigan

Date Written: August 5, 2018

Abstract

We examine how directors’ reputations are managed through disclosure choices. We focus on disclosures in the director biographies in proxy statements filed with the SEC. We find that a directorship on another board is more likely to be undisclosed when the other firm experienced an adverse event during the director’s tenure. Withholding such information is associated with a more favorable stock price reaction to the director’s appointment and the loss of fewer subsequent directorships. These findings suggest that the concerns about the reputations of corporate directors lead to strategic disclosure choices that have real consequences in 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 (August 5, 2018). Journal of Accounting & Economics (JAE), Vol. 66, No. 2-3, 2018. Available at SSRN: https://ssrn.com/abstract=2850576 or http://dx.doi.org/10.2139/ssrn.2850576

Ian D. Gow

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

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)

University of Michigan ( email )

701 Tappan Street
R3350
Ann Arbor, MI MI 48109
United States
7347635934 (Phone)

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