scholarly journals Industry Expertise of Independent Directors and Board Monitoring

2015 ◽  
Vol 50 (5) ◽  
pp. 929-962 ◽  
Author(s):  
Cong Wang ◽  
Fei Xie ◽  
Min Zhu
Keyword(s):  
Earnings Management ◽  
Chief Executive Officer ◽  
Audit Committee ◽  
Chief Executive ◽  
Ceo Turnover ◽  
Independent Directors ◽  
Compensation Committee ◽  
Board Monitoring ◽  
Industry Experience ◽  
Industry Expertise

AbstractWe examine whether the industry expertise of independent directors affects board monitoring effectiveness. We find that the presence of independent directors with industry experience on a firm’s audit committee significantly curtails firms’ earnings management. In addition, a greater representation of independent directors with industry expertise on a firm’s compensation committee reduces chief executive officer (CEO) excess compensation, and a greater presence of such directors on the full board increases the CEO turnover-performance sensitivity and improves acquirer returns from diversifying acquisitions. Overall, the evidence is consistent with the hypothesis that having relevant industry expertise enhances independent directors’ ability to perform their monitoring function.

scholarly journals Praktik Manajemen Laba dan Reaksi Pasar Setelah Event Pergantian Chief Executive Officer (CEO)

2021 ◽  
Vol 31 (4) ◽  
Author(s):  
Desak Nyoman Sri Juliartini ◽  
Ida Bagus Putra Astika
Keyword(s):  
Earnings Management ◽  
Chief Executive Officer ◽  
Stock Price ◽  
Management Practices ◽  
Market Reaction ◽  
Sampling Technique ◽  
Chief Executive ◽  
Total Sample ◽  
Ceo Turnover ◽  
Analysis Technique

This research is to prove after the change of chief executive officer (CEO) of earnings management practices and market reaction. The total sample taken was using the nonprabability sampling method with a purposive sampling technique of 48 companies on the IDX which included the LQ45 index. The analysis technique used is simple linear regression and paired sample t-test on the DA and PER values of the company. Based on the results of the analysis found that there is no effect of earnings management on market reaction after one and two years of CEO turnover. These results prove that there is no important information on the announcement of CEO turnover, so it is less able to make significant stock price fluctuations. The next result is no difference in both earnings management and market reaction that occurs one and two years after CEO turnover. Keywords: Chief Executive Officer (CEO); Earning Management; Market Reaction; Price Earning Ratio (PER).

How Does Forced-CEO-Turnover Experience Affect Directors?

2020 ◽  
pp. 1-29 ◽  
Author(s):  
Jesse Ellis ◽  
Lixiong Guo ◽  
Shawn Mobbs
Keyword(s):  
Labor Market ◽  
Chief Executive Officer ◽  
Labor Market Outcomes ◽  
Chief Executive ◽  
Ceo Turnover ◽  
Independent Directors ◽  
Board Meeting ◽  
Market Outcomes ◽  
The Cost ◽  
Underperforming Firms

Abstract We study changes in independent director behavior and labor-market outcomes after the experience of a forced Chief Executive Officer (CEO) turnover. We find that independent directors are more willing to fire CEOs of underperforming firms, hire outside CEOs after a firing, and encourage better board-meeting attendance by fellow directors. We also find that the shareholders of poorly performing firms react positively when experienced directors join the board. It does come with a small cost for directors, in terms of additional directorships, although the cost is not as great as that for directors who do not fire the CEO of a poorly performing firm.

CEOs Under Fire: The Effects of Competition from Inside Directors on Forced CEO Turnover and CEO Compensation

2013 ◽  
Vol 48 (3) ◽  
pp. 669-698 ◽  
Author(s):  
Shawn Mobbs
Keyword(s):  
Chief Executive Officer ◽  
Ceo Compensation ◽  
Chief Executive ◽  
Ceo Turnover ◽  
Stock Performance ◽  
Accounting Performance ◽  
Inside Directors ◽  
Board Monitoring ◽  
Firm Selection ◽  
Selection Of

AbstractThis study examines board monitoring when a credible chief executive officer (CEO) replacement is on the board. Inside directors whose talents are in greater demand externally, as reflected by their holding outside directorships, are more likely to become CEOs, and their presence is associated with greater forced CEO turnover sensitivity to accounting performance and CEO compensation sensitivity to stock performance. These results reveal that certain insiders strengthen board monitoring by serving as a readily available CEO replacement and contradict the presumption that all insiders are under CEO control. Furthermore, the results persist when accounting for the endogenous firm selection of talented inside directors.

scholarly journals Do Companies with Female on the Board have Effects on the Earning Management? Evidence Indonesia Manufacturing Listed Firms

2021 ◽  
Vol 1 (1) ◽  
pp. 19-25
Author(s):  
Theresia Trisanti
Keyword(s):  
Earnings Management ◽  
Chief Executive Officer ◽  
Audit Committee ◽  
Management Practices ◽  
Management Practice ◽  
Chief Executive ◽  
Partial Least Square ◽  
Earning Management ◽  
Chief Financial Officer ◽  
Manufacturing Companies

This study aims to examine the influence of the presence of women on the board such as chief executive officer, chief financial officer and chief audit committee on the earning management (EM) practices and also to examine whether the educational backgrounds of women executive officials have a moderating effect on the earning management practice. The data used is secondary data from Indonesian listed manufacturing companies, hypothesis testing using regression model with partial least square test. Sampling was carried out using a purposive sampling method. The results showed that female chief executive officer and female chief financial officer did not affect earning management practice, but woman as chief audit committee affect the company's earnings management practices. Education background capable as moderating variable to strengthen the influence women as chief executive officer, chief financial officer and women as chief audit committee to earnings management practices. This research can provide contribution for users of financial statements about the possibility of differences in earnings management practices due to the presence of women in top management positions.

scholarly journals Keberadaan Corporate Governance Sebagai Variabel Moderasi Pengaruh Financial Distress Terhadap Earnings Management

2016 ◽  
Vol 19 (1) ◽  
pp. 91
Author(s):  
Dody Hapsoro ◽  
Adrianus Billy Hartomo
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Board Of Directors ◽  
Chief Executive Officer ◽  
Firm Size ◽  
Significant Relationship ◽  
Financial Distress ◽  
Audit Committee ◽  
Chief Executive ◽  
Size Variable

<p align="center"><em>The objective of this research is to provide empirical evidence of the effect of financial distress toward earnings management and the effect of financial distress toward earnings management that moderated by corporate governance. Financial distress consists of DISTRESS1, DISTRESS2 and DISTRESS3. Earnings management was measured by discretionary accruals using Jones Model, and corporate governance consists of three variables (board of directors, independent commissioner, and audit committee). Board of directors was measured by total board of directors in the firm included chief executive officer (CEO)</em>.<em> I</em><em>ndependent commissioner was measured by the proportion of independent commissioner that is total independent commissioner divided by total board of commissioner and audit committee was measured by total member of audit committee. Control variable in this research is firm size that was measured by logarithm of asset total. The population of this research is 423 non-financial companies were listed in Indonesian Stock Exchange (IDX). The research data were collected from non-financial companies annual report for the period of 2014. Based on purposive sampling method, there are 62 samples. The research hypothesis were tested by using multiple regression analysis. The results of this research in Model 1 show that firm size variable has significant relationship with earnings management, while DISTRESS1 variable, DISTRESS2 variable, and DISTRESS3 variable have no significant relationship with earnings management. The result of this research in Model 2 show that DISTRESS3 variable, independent commissioner variable, and interaction between financial distress with corporate governance variable have significant relationship with earnings management, while DISTRESS1 variable, DISTRESS2 variable, board of directors variable, audit committee variable, and firm size variable have no significant with relationship earnings management.</em></p><p><em><br /></em></p><p align="center"><strong>Abstrak</strong></p><p align="center"><strong><em> </em></strong></p><p>Tujuan dari penelitian ini adalah untuk memberikan bukti empiris pengaruh kesulitan keuangan terhadap manajemen laba dan pengaruh kesulitan keuangan terhadap manajemen laba yang dimoderasi oleh tata kelola perusahaan. Kesulitan keuangan terdiri dari DISTRESS1, DISTRESS2 dan DISTRESS3. Manajemen laba diukur dengan menggunakan akrual diskresioner yang mengaplikasikan Model Jones, dan tata kelola perusahaan terdiri dari tiga variabel (dewan direksi, komisaris independen, dan komite audit). Direksi diukur dengan menggunakan jumlah dewan direksi di dalam perusahaan termasuk chief executive officer (CEO). Komisaris independen diukur dengan menggunakan proporsi komisaris independen dimana total komisaris independen dibagi dengan total dewan komite komisaris, dan komite audit diukur dengan menggunakan jumlah anggota komite audit. Variabel kontrol dalam penelitian ini adalah ukuran perusahaan yang diukur dengan menggunakan logaritma total aset. Populasi dalam penelitian ini adalah 423 perusahaan non keuangan yang terdaftar di Bursa Efek Indonesia (BEI). Data penelitian dikumpulkan dari laporan tahunan perusahaan non-keuangan untuk periode 2014. Berdasarkan metode purposive sampling terdapat  62 sampel penelitian. Hipotesis dalam penelitian ini diuji dengan menggunakan analisis regresi berganda. Hasil penelitian pada Model 1 menunjukkan bahwa ukuran perusahaan memiliki hubungan yang signifikan dengan manajemen laba, sedangkan variabel DISTRESS1, variabel DISTRESS2, dan variabel DISTRESS3 tidak memiliki hubungan yang signifikan dengan manajemen laba. Hasil penelitian pada Model 2 menunjukkan bahwa variabel DISTRESS3, komisaris independen, dan interaksi antara kesulitan keuangan dengan tata kelola perusahaan memiliki hubungan yang signifikan dengan manajemen laba, sedangkan variabel DISTRESS1, variabel DISTRESS2, dewan direksi, komite audit, dan ukuran perusahaan tidak memiliki hubungan signifikan dengan manajemen laba.<em><br /></em></p>

scholarly journals Reaksi Pasar Terhadap Pengumuman Pergantian CEO di Bursa Efek Indonesia

2018 ◽  
pp. 2430
Author(s):  
I Kadek Diky Agusnawan ◽  
Dewa Gede Wirama
Keyword(s):  
Event Study ◽  
Chief Executive Officer ◽  
Capital Market ◽  
Abnormal Return ◽  
Abnormal Returns ◽  
Chief Executive ◽  
Ceo Turnover ◽  
Company Performance ◽  
Cumulative Abnormal Return ◽  
Event Study Method

Announcement of CEO turnover indicates a change in company management in order to improve company performance. The purpose of this study is to test whether the capital market reacts to CEO turnover announcements. This study uses event study method and the sample was selected purposively. The research sample consisted of 79 companies listed in the IDX. Based on the results of the analysis it is found that there are no abnormal returns around the CEO turnover announcement. The results shows that there is no information content in the CEO turnover announcement. The results of this study is consistent with the research of Warner et al., (1998) and Setiawan (2008). The results of the study is not consistent with the research of Weisbach (1988), Kang and Shivdasani (1996), Derment-Ferere and Renneboog (2000), Bahtera (2017). Keywords: Chief executive officer, cumulative abnormal return, market reaction

scholarly journals Board Committees, CEO Compensation, and Earnings Management

2009 ◽  
Vol 84 (3) ◽  
pp. 869-891 ◽  
Author(s):  
Christian Laux ◽  
Volker Laux
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Ceo Compensation ◽  
Incentive Pay ◽  
Compensation Committee ◽  
Board Committees ◽  
Ceo Incentives ◽  
Ceo Pay ◽  
The Board Of Directors

ABSTRACT:We analyze the board of directors' equilibrium strategies for setting CEO incentive pay and overseeing financial reporting and their effects on the level of earnings management. We show that an increase in CEO equity incentives does not necessarily increase earnings management because directors adjust their oversight effort in response to a change in CEO incentives. If the board's responsibilities for setting CEO pay and monitoring are separated through the formation of committees, then the compensation committee will increase the use of stock-based CEO pay, as the increased cost of oversight is borne by the audit committee. Our model generates predictions relating the board committee structure to the pay-performance sensitivity of CEO compensation, the quality of board oversight, and the level of earnings management.

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