Does Board Independence Mitigate Potential Adverse Effects of Private In-House Meetings?

68 Pages Posted: 25 Apr 2018  

Robert M. Bowen

Univeristy of San Diego - School of Business; University of Washington - Foster School of Business; Foster School of Business ; University of San Diego - Department of Accountancy

Shantanu Dutta

University of Ottawa - Telfer School of Management

Songlian Tang

East China University of Science and Technology (ECUST)

Pengcheng Zhu

University of San Diego

Date Written: April 4, 2018

Abstract

We examine the effectiveness of board independence in promoting positive aspects of private in-house meetings between management and investors while curbing opportunistic insider trading activities around these meetings. Consistent with private meetings having benefits, we find a positive association between board independence and (i) private meeting frequency, and (ii) timeliness of disclosures to the public. Consistent with reducing the potential costs of private meetings, we find an association between board independence and (i) relatively subdued market reactions to these private meetings, (ii) reduced insider trading frequency around private in-house meetings, and (iii) reduced insider trading profitability around private in-house meetings -- and in general among sample firms.

Keywords: private in-house meetings, site visits, board independence, disclosure, insider trading, regulation

Suggested Citation

Bowen, Robert M. and Dutta, Shantanu and Tang, Songlian and Zhu, Pengcheng, Does Board Independence Mitigate Potential Adverse Effects of Private In-House Meetings? (April 4, 2018). Available at SSRN: https://ssrn.com/abstract=3157194 or http://dx.doi.org/10.2139/ssrn.3157194

Robert M. Bowen (Contact Author)

Univeristy of San Diego - School of Business ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

HOME PAGE: http://https://www.sandiego.edu/business/undergraduate/accountancy/biography.php?profile_id=1799

University of Washington - Foster School of Business ( email )

Box 353226
University of Washington
Seattle, WA 98195-3226
United States

HOME PAGE: http://https://foster.uw.edu/faculty-research/directory/robert-bowen/

Foster School of Business ( email )

557 Paccar Hall
Seattle, WA 98195
United States
(206) 543-4569 (Phone)
(206) 685-9392 (Fax)

HOME PAGE: http://faculty.washington.edu/rbowen/

University of San Diego - Department of Accountancy ( email )

223 Olin Hall
5998 Alcalá Park
San Diego, CA 92110
United States
619.260.2385 (Phone)

HOME PAGE: http://www.sandiego.edu/business/directory/biography.php?id=1232

Shantanu Dutta

University of Ottawa - Telfer School of Management ( email )

136 Jean-Jacques Lussier Street
Ottawa, Ontario K1N 6N5
Canada

Songlian Tang

East China University of Science and Technology (ECUST) ( email )

Shanghai
China

Pengcheng Zhu

University of San Diego ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

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