Weitere Artikel dieser Ausgabe durch Wischen aufrufen
We investigate the regulatory sanctions imposed on independent directors for their firms’ financial frauds in China. These regulatory sanctions are prima-facie evidence of significant lapses in business ethics. During the period 2003–2010, 302-person-time independent directors were penalized by the regulator (the China Securities Regulatory Commission—the CSRC), and the two stock exchanges. We find that the independent directors with accounting experiences are more likely to be penalized by the CSRC, though they do not suffer more severe penalties than do the other sanctioned independent directors. We also find that independent directors suffer less severe penalties than do the insider directors. These results are consistent with the hypothesis that the sanctions on independent directors are tied to their assumed ethical and legal responsibilities. Following a regulatory sanction, penalized independent directors experience a significant decline in the number of other board seats held. However, they can gain board seats in better quality firms. We find that interlocked firms that share penalized independent directors with the fraud firm do not suffer from a valuation decline. Overall, our results suggest that regulatory sanctions have not triggered further sanctions on the penalized directors in the labor market but they have, instead, created a disincentive for these directors to serve on the company boards of high-risk firms.
Bitte loggen Sie sich ein, um Zugang zu diesem Inhalt zu erhalten
Sie möchten Zugang zu diesem Inhalt erhalten? Dann informieren Sie sich jetzt über unsere Produkte:
Adams, R. B., Hermalin, B. E., & Weisbach, M. S. (2010). The role of boards of directors in corporate governance: A conceptual framework and survey. Journal of Economic Literature, 48(1), 58–107. CrossRef
Agrawal, A., & Chadha, S. (2005). Corporate governance and accounting scandals. Journal of Law and Economics, 48(2), 371–406. CrossRef
Anderson, D. M. (2000). Taking stock in China: Company disclosure and information in China’s stock markets. Georgetown Law Journal, 88, 1919–1952.
Ball, R. (2001). Infrastructure requirements for an economically efficient system of public financial reporting and disclosure. Brookings-Wharton Papers on Financial Services, 2001(1), 127–169. CrossRef
Ball, R. (2009). Market and political/regulatory perspectives on the recent accounting scandals. Journal of Accounting Research, 47(2), 277–323. CrossRef
Black, B., Cheffins, B., & Klausner, M. (2006). Outside director liability. Stanford Law Review, 58, 1055–1160.
Chen, G., Firth, M., Gao, D. N., & Rui, O. M. (2005). Is China’s securities regulatory agency a toothless tiger? Evidence from enforcement actions. Journal of Accounting and Public Policy, 24(6), 451–488. CrossRef
Chen, G., Firth, M., & Xu, L. (2009). Does the type of ownership control matter? Evidence from China’s listed companies. Journal of Banking & Finance, 33(1), 171–181. CrossRef
China Securities Regulatory Commission (CSRC). (2001). Code of Corporate Governance for Listed Companies in China. Beijing: CSRC.
Claessens, S., & Yurtoglu, B. (2012). Corporate governance in emerging markets: A survey. Emerging Markets Review, 15, 1–33. CrossRef
Cohan, J. A. (2002). “I didn’t know” and “I was only doing my job”: Has corporate governance careened out of control? A case study of Enron’s information myopia. Journal of Business Ethics, 40(3), 275–299. CrossRef
Duchin, R., Matsusaka, J. G., & Ozbas, O. (2010). When are outside directors effective? Journal of Financial Economics, 96(2), 195–214. CrossRef
Fahlenbrach, R., Low, A., & Stulz, R. M. (2010). The dark side of outside directors: Do they quit when they are most needed? NBER working paper series No. 15917.
Fama, E., & Jensen, M. (1983). The separation of ownership and control. Journal of Law and Economics, 26(2), 301–325. CrossRef
Fan, G., & Wang, X. (2011). The report on the relative process of marketization of each region in China. Beijing: The Economic Science Press.
Fich, E. M. (2005). Are some outside directors better than others? Evidence from director appointments by Fortune 1,000 firms. Journal of Business, 78(5), 1943–1971. CrossRef
Fich, E. M., & Shivdasani, A. (2007). Financial fraud, director reputation, and shareholder wealth. Journal of Financial Economics, 86(2), 306–336. CrossRef
Firth, M. (1990). Auditor reputation: The impact of critical reports issued by government inspectors. The Rand Journal of Economics, 21(3), 374–387. CrossRef
Firth, M., Mo, P. L. L., & Wong, R. M. K. (2005). Financial statement frauds and auditor sanctions: An analysis of enforcement actions in China. Journal of Business Ethics, 62(4), 367–381. CrossRef
Firth, M., Rui, O. M., & Wu, W. (2011). Cooking the books: Recipes and costs of falsified financial statements in China. Journal of Corporate Finance, 17(2), 371–390. CrossRef
Glaeser, E., Johnson, S., & Shleifer, A. (2001). Coase versus the Coasians. Quarterly Journal of Economics, 116(3), 853–899. CrossRef
Hayek, F. A. (1989). The Fatal Conceit: The Errors of Socialism. Ed. by W. W. Bartley III. vol. 1 of The Collected Works of F. A. Hayek. London: Routledge and Chicago: University of Chicago Press.
Hou, H., & Moore, G. (2010). Player and referee roles held jointly: The effect of state ownership on China’s regulatory enforcement against fraud. Journal of Business Ethics, 95(2), 317–335. CrossRef
Jiang, G., Lee, C. M., & Yue, H. (2010). Tunneling through inter-corporate loans: The China experience. Journal of Financial Economics, 98(1), 1–20. CrossRef
Jie, Y. (2007). Formal convergence or substantial divergence: Evidence from adoption of the independent director system in China. Asia-Pacific Law and Policy Journal, 9, 72–104.
Liebman, B. L., & Milhaupt, C. J. (2008). Reputational sanctions in China’s securities markets. Columbia Law Review, 108, 929–983.
Lo, A. W., Wong, R. M., & Firth, M. (2010). Can corporate governance deter management from manipulating earnings? Evidence from related-party sales transactions in China. Journal of Corporate Finance, 16(2), 225–235. CrossRef
Luckerath-Rovers, M., & De Bos, A. (2011). Code of conduct for non-executive and supervisory directors. Journal of Business Ethics, 100(3), 465–481. CrossRef
Organization of Economic Cooperation and Development (OECD). (2004). OECD Principles of Corporate Governance, Revised Edition. Paris: OECD Publications Service.
Persons, O. S. (2006). The effects of fraud and lawsuit revelation on U.S. executive turnover and compensation. Journal of Business Ethics, 64(4), 405–419. CrossRef
Pool, V. K., Wang, C., & Xie, F. (2009). Corporate scandal, director reputation, and shareholder value: Ex-post settling up, spillover, and distraction. SSRN working paper.
Pozner, J. E. (2008). Stigma and setting up: An integrated approach to the consequences of organizational misconduct for organizational elites. Journal of Business Ethics, 80(1), 141–150. CrossRef
Robertson, C. J., Blevins, D. P., & Duffy, T. (2013). A five-year review, update, and assessment of ethics and governance in Strategic Management Journal. Journal of Business Ethics, 117(1), 85–91. CrossRef
Rosner, R. L. (2003). Earnings manipulation in failing firms. Contemporary Accounting Research, 20(2), 361–408. CrossRef
Schwartz, M. S., Dunfree, T. W., & Kline, M. J. (2005). Tone at the top: An ethics code for directors? Journal of Business Ethics, 58(1–3), 79–100. CrossRef
Shivdasani, A., & Yermack, D. (1999). CEO involvement in the selection of new board members: An empirical analysis. Journal of Finance, 54(5), 1829–1853. CrossRef
Shleifer, A. (2005). Understanding regulation. European Financial Management, 11(4), 439–451. CrossRef
Srinivasan, S. (2005). Consequences of financial reporting failure for outside directors: Evidence from accounting restatements. Journal of Accounting Research, 43(2), 291–334. CrossRef
U.S. Government. (2002). Sarbanes-Oxley Act of 2002. Washington, DC.
Vanderwaerde, M., Voordeckers, W., Lambreechts, F., & Bammens, Y. (2011). Board team leadership revisted: A conceptual model of shared leadership in the boardroom. Journal of Business Ethics, 104(3), 403–420. CrossRef
Yermack, D. (2004). Remuneration, retention, and reputation incentives for outside directors. Journal of Finance, 59(5), 2281–2308. CrossRef
Zhu, D. H., & Chang, Y. P. (2013). Negative publicity effect of the business founder’s unethical behavior on corporate image: Evidence from China. Journal of Business Ethics, 117(1), 111–121. CrossRef
- Regulatory Sanctions on Independent Directors and Their Consequences to the Director Labor Market: Evidence from China
Ho Yin Yick
- Springer Netherlands
Neuer Inhalt/© Stellmach, Neuer Inhalt/© Maturus, Pluta Logo/© Pluta