Media Tone and CEO Power

47 Pages Posted: 27 Jul 2018

See all articles by Jiexiang Huang

Jiexiang Huang

University of Otago - Department of Accountancy and Finance

Helen Roberts

University of Otago - Department of Accountancy and Finance

Eric K. M. Tan

University of Queensland - Business School

Date Written: July 6, 2018

Abstract

This study investigates the monitoring role of media tone on Chief Executive Officer (CEO) power. Using CEO pay slice (CPS) as a measure of CEO power, we find that negative tone is associated with a reduction in CEO power. The finding extends the theoretical framework explaining the importance and influence of media on corporate governance. Consistent with theoretical predictions, we find that the impact of negative tone on the extent of CEO power is stronger in well-governed firms. The evidence suggests that media tone plays an important role as an external monitor, moderating corporate governance through the dissemination of news.

Keywords: Media Tone; CEO Power; Corporate Governance

JEL Classification: G32, G34

Suggested Citation

Huang, Jiexiang and Roberts, Helen and Tan, Eric K. M., Media Tone and CEO Power (July 6, 2018). Available at SSRN: https://ssrn.com/abstract=3220885 or http://dx.doi.org/10.2139/ssrn.3220885

Jiexiang Huang (Contact Author)

University of Otago - Department of Accountancy and Finance ( email )

PO Box 56
Dunedin, 9054
New Zealand

Helen Roberts

University of Otago - Department of Accountancy and Finance ( email )

PO Box 56
Dunedin, 9054
New Zealand
6434798072 (Phone)
6434798171 (Fax)

Eric K. M. Tan

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

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