The Effects of Board Composition and Board Size on the Informativeness of Annual Accounting Earnings

14 Pages Posted: 17 Sep 2006

See all articles by Kamran Ahmed

Kamran Ahmed

La Trobe Business School, La Trobe University

Mahmud Hossain

Nanyang Technological University (NTU) - Division of Accounting

Mike B. Adams

Nanyang Business School, Nanyang Technological University

Abstract

This study extends earlier research on corporate governance by examining whether the information-usefulness of annual accounting earnings varies with the fraction of outside directors serving on the board and board size. Using panel data from New Zealand (NZ) firms for the financial years 1991-97, we find that earnings informativeness is negatively related to board size but is not related to the fraction of outside directors serving on the board. Our results are robust to controlling for various firm-specific factors that are known to be associated with earnings informativeness.

Suggested Citation

Ahmed, Kamran and Hossain, Mahmud and Adams, Mike B., The Effects of Board Composition and Board Size on the Informativeness of Annual Accounting Earnings. Corporate Governance: An International Review, Vol. 14, No. 5, pp. 418-431, September 2006, Available at SSRN: https://ssrn.com/abstract=930766 or http://dx.doi.org/10.1111/j.1467-8683.2006.00515.x

Kamran Ahmed (Contact Author)

La Trobe Business School, La Trobe University ( email )

Kingsbury Drive
Melbourne, VIC 3086
Australia
0403038387 (Phone)
3105 (Fax)

Mahmud Hossain

Nanyang Technological University (NTU) - Division of Accounting ( email )

Nanyang Business School
Singapore, 639798
SINGAPORE
+ 65 792 4217 (Fax)

Mike B. Adams

Nanyang Business School, Nanyang Technological University

Singapore, 639798
Singapore

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