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Do Board Secretaries Influence Management Earnings Forecasts?

52 Pages Posted: 21 Feb 2017  

Lu Xing

University of Edinburgh - Business School

Tinghua Duan

University of Edinburgh - Business School; New York University (NYU) - Department of Finance

Wenxuan Hou

University of Edinburgh - Business School

Date Written: February 19, 2017

Abstract

The role of board secretaries is a unique institutional feature in China. Individuals in this senior executive role are responsible for coordinating information disclosure. We study the impact of board secretaries on management earnings forecasts and find that their legal expertise, accounting expertise and foreign experience helps improve management earnings forecast quality. The quality of forecasts, as indicated by their occurrence, frequency, precision and accuracy, is also positively associated with the role duality (e.g. board director, CFO or other senior executive role) and equity holdings of board secretaries, and negatively associated with their political connection. The quality of forecasts is found to increase the compensation of board secretaries. Finally, we show that the equity holding of board secretaries reduces litigation risks and increases corporate philanthropic giving.

Keywords: Board secretary; management earnings forecasts; China; top management team; litigation risk

JEL Classification: G30; M12; M41

Suggested Citation

Xing, Lu and Duan, Tinghua and Hou, Wenxuan, Do Board Secretaries Influence Management Earnings Forecasts? (February 19, 2017). Journal of Business Ethics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2920304

Lu Xing

University of Edinburgh - Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
UNITED KINGDOM

Tinghua Duan

University of Edinburgh - Business School ( email )

29 Bucclech Place
Edinburgh
Edinburgh, EH8 9JS
United Kingdom

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States

Wenxuan Hou (Contact Author)

University of Edinburgh - Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
United Kingdom

HOME PAGE: http://www.wenxuanhou.com

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