The Role of Management Talent in the Production of Informative Regulatory Filings

53 Pages Posted: 5 Sep 2017 Last revised: 27 Mar 2018

See all articles by Samuel B. Bonsall

Samuel B. Bonsall

Pennsylvania State University - Department of Accounting

Eric Holzman

The Ohio State University - Department of Accounting & Management Information Systems

Brian P. Miller

Indiana University - Kelley School of Business - Department of Accounting

Date Written: March 22, 2018

Abstract

This study examines the extent to which managerial talent plays a role in shaping the clarity of regulated financial disclosures and a firm’s information environment. Consistent with the notion that clear thinking leads to clear writing, we find more able management teams produce clearer and more concise financial filings. Additional analyses provide evidence that the association is distinct from the impact of overall performance on clearer writing. Further, mediation (path) analyses reveal that talented management teams positively impact the post-filing information environment (i.e., lower analyst forecast errors and dispersion) through clearer writing. Lastly, we find that the positive influence of management talent on financial filing readability is decreasing in the management team’s insider selling incentives. Overall, this study highlights how an essential managerial characteristic, talent, shapes the informativeness of regulatory filings.

Keywords: managerial ability; managerial efficiency; financial statement readability; plain English

JEL Classification: M40

Suggested Citation

Bonsall, Samuel B. and Holzman, Eric and Miller, Brian P., The Role of Management Talent in the Production of Informative Regulatory Filings (March 22, 2018). Kelley School of Business Research Paper No. 17-65. Available at SSRN: https://ssrn.com/abstract=3029669 or http://dx.doi.org/10.2139/ssrn.3029669

Samuel B. Bonsall

Pennsylvania State University - Department of Accounting ( email )

University Park, PA 16802-3306
United States

Eric Holzman

The Ohio State University - Department of Accounting & Management Information Systems ( email )

2100 Neil Avenue
Columbus, OH 43210
United States

Brian P. Miller (Contact Author)

Indiana University - Kelley School of Business - Department of Accounting ( email )

1309 E. 10th Street
Bloomington, IN 47405
United States
812-855-2606 (Phone)

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