Board Meetings Dynamics and Information Diffusion

Corporate Governance: an International Review, Forthcoming

61 Pages Posted: 14 Nov 2021 Last revised: 2 Dec 2021

See all articles by Stefano Bonini

Stefano Bonini

Stevens Institute of Technology - School of Business

Valentina Lagasio

Sapienza University

Date Written: November 12, 2021

Abstract

We exploit a unique regulatory requirement of the Italian Stock Exchange that mandates the publication of board meeting minutes when the board votes on "price sensitive" matters to gather detailed data about directors participation, discussions, voting and the dissemination of their decisions to the market. In a large, multi-year sample of almost 900 board meetings minutes, we document previously unavailable patterns of board meetings participation and discussion, and highlight the moderating role of key governance mechanisms. Looking at the economic value of board meetings we document significant delays in the diffusion of information in the market that may be indicative of information leakage. Our results are consistent with a supervisory approach model of boards where consensus is high and dissent is costly. However they cast doubt on the efficacy of boards as a counterbalancing mechanism to the power of executives.

Keywords: Corporate Governance, Board meetings, Information Diffusion

JEL Classification: G12, G18, G34

Suggested Citation

Bonini, Stefano and Lagasio, Valentina, Board Meetings Dynamics and Information Diffusion (November 12, 2021). Corporate Governance: an International Review, Forthcoming , Available at SSRN: https://ssrn.com/abstract=3962493 or http://dx.doi.org/10.2139/ssrn.3962493

Stefano Bonini (Contact Author)

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

Valentina Lagasio

Sapienza University ( email )

Via del Castro Laurenziano, 9
Rome, 00185
Italy

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