Disclosing Directors

36 Pages Posted: 17 Oct 2018 Last revised: 25 Oct 2018

See all articles by Piergaetano Marchetti

Piergaetano Marchetti

Bocconi University - Department of Law

Gianfranco Siciliano

China Europe International Business School

Marco Ventoruzzo

Pennsylvania State University - Dickinson Law; Bocconi University - Department of Law

Date Written: October 11, 2018

Abstract

Is there a correlation between the composition of the board of directors and the quantity and quality of information disclosed to the market, and in particular with respect to the disclosure of privileged, price-sensitive information? Our work examines this question with respect to the Italian Stock Exchange, considering also the role of minority-appointed directors in light of the Italian rules on slate voting that facilitate the election of directors by institutional investors and other minority shareholders. Based on a unique data-set of hand-picked data, we answer the basic research question in the affirmative. Independent directors and minority-appointed directors appear to have a positive impact on the amount and, to some extent, quality of disclosure, in particular if their have specific professional and educational qualifications (“high-skilled directors”). We also tested if the market reacts to the information that is made public, in order to consider the possible objection that outside directors simply require more disclosure of unimportant information. The event studies we conducted, however, indicate abnormal returns in correspondence of the announcements we considered. The study sheds light on the role of independent and minority-appointed directors suggesting that they foster corporate transparency.

Keywords: Corporate disclosure, independent directors, minority-appointed directors, priviledged information

JEL Classification: K22

Suggested Citation

Marchetti, Piergaetano and Siciliano, Gianfranco and Ventoruzzo, Marco, Disclosing Directors (October 11, 2018). Bocconi Legal Studies Research Paper No. 3264763; European Corporate Governance Institute (ECGI) - Law Working Paper No. 420/2018. Available at SSRN: https://ssrn.com/abstract=3264763 or http://dx.doi.org/10.2139/ssrn.3264763

Piergaetano Marchetti

Bocconi University - Department of Law ( email )

Via Roentgen, 1
Milan, 20136
Italy

Gianfranco Siciliano

China Europe International Business School ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206
China

Marco Ventoruzzo (Contact Author)

Pennsylvania State University - Dickinson Law ( email )

Lewis Katz Building
University Park, PA 16802
United States

HOME PAGE: https://law.psu.edu/faculty/ventoruzzo

Bocconi University - Department of Law ( email )

Via Roentgen, 1
Milan, 20136
Italy

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