Information Disclosure and Corporate Governance

Information Disclosure and Corporate Governance

0.00 Avg rating0 Votes
Article ID: iaor2012435
Volume: 67
Issue: 1
Start Page Number: 195
End Page Number: 234
Publication Date: Feb 2012
Journal: The Journal of Finance
Authors: ,
Keywords: management
Abstract:

Public policy discussions typically favor greater corporate disclosure as a way to reduce firms’ agency problems. This argument is incomplete because it overlooks that better disclosure regimes can also aggravate agency problems and related costs, including executive compensation. Consequently, a point can exist beyond which additional disclosure decreases firm value. Holding all else equal, we further show that larger firms will adopt stricter disclosure rules than smaller firms and firms with better disclosure will employ more able management. We show that mandated increases in disclosure could, in part, explain recent increases in both CEO compensation and CEO turnover rates.

Reviews

Required fields are marked *. Your email address will not be published.