Corporate control contests and the asymmetric disclosure of bad news: Evidence from peer firm disclosure response to takeover threat

2021 ◽  
Author(s):  
Shuping Chen ◽  
Bin Miao ◽  
Kristen Valentine
Keyword(s):  
Voluntary Disclosure ◽  
Corporate Control ◽  
Bad News ◽  
Hostile Takeover ◽  
Conference Call ◽  
Total Compensation ◽  
Peer Firms ◽  
Negative Tone ◽  
Disclosure Strategy ◽  
The Impact

We examine the voluntary disclosure behavior of peer firms of hostile takeover targets. We find that peer firms under control threat use a disclosure strategy that emphasizes bad news: they provide more bad news forecasts, tend to bundle bad news forecasts with earnings announcements, use more negative tone in conference call presentations, and more evenly distribute negative tonal words throughout the presentation to heighten the visibility of bad news. This asymmetric disclosure of bad news is concentrated in firms whose managers have greater incentives to mitigate control threats - firms with younger CEOs, CEOs with higher total compensation, and firms with weaker anti-takeover provisions. Further tests show that peer firms also manage accruals downward. We contribute to the sparse literature on the impact of corporate control contests on voluntary disclosure by demonstrating that peer firms under control threat emphasize bad news to preempt control threat.

The Effect of Voluntary Disclosure and Preemptive Preannouncements on Earnings Response Coefficients (ERC) When Firms Manage Earnings

2003 ◽  
Vol 18 (3) ◽  
pp. 379-409 ◽  
Author(s):  
Joshua Ronen ◽  
Tavy Ronen ◽  
Varda (Lewinstein) Yaari
Keyword(s):  
Earnings Management ◽  
Voluntary Disclosure ◽  
Bad News ◽  
Good News ◽  
Earnings Response Coefficients ◽  
Earnings Response Coefficient ◽  
Earnings Surprise ◽  
Response Coefficient ◽  
Earnings Response ◽  
Disclosure Strategy

We study analytically the effect of preliminary voluntary disclosure and preemptive preannouncement on the slope of the regression of returns on earnings surprise—the earnings response coefficient (ERC). When firms do not manage earnings, additional disclosure has no effect, and the ERC is proportional to price/permanent earnings ratio. If they manage earnings by attempting to inflate them, the response to (100% credible) negative earnings surprise is stronger than the response to (less than 100% credible) positive surprise. To avert litigation, firms that manage earnings adopt a partial voluntary disclosure strategy—either public revelation of good news and withholding bad news, or public revelation of bad news and withholding good news. Voluntary disclosure affects ERC on positive earnings surprise only, depending on what the firm reveals: the good- news revealing ERC (GRC) is higher than the bad-news revealing ERC (BRC), because good news enhances the credibility of the positive earnings surprise, even though the market discounts good news. Furthermore, preemptive pre-announcements improve ERC accuracy by narrowing the scope of earnings management.

Do Managers Disclose or Withhold Bad News? Evidence from Short Interest

2018 ◽  
Vol 94 (3) ◽  
pp. 1-26 ◽  
Author(s):  
Dichu Bao ◽  
Yongtae Kim ◽  
G. Mujtaba Mian ◽  
Lixin (Nancy) Su
Keyword(s):  
Private Information ◽  
Voluntary Disclosure ◽  
Stock Price ◽  
Data Availability ◽  
Bad News ◽  
General Tendency ◽  
Litigation Risk ◽  
Novel Approach ◽  
Conflicting Evidence ◽  
Short Interest

ABSTRACT Prior studies provide conflicting evidence as to whether managers have a general tendency to disclose or withhold bad news. A key challenge for this literature is that researchers cannot observe the negative private information that managers possess. We tackle this challenge by constructing a proxy for managers' private bad news (residual short interest) and then perform a series of tests to validate this proxy. Using management earnings guidance and 8-K filings as measures of voluntary disclosure, we find a negative relation between bad-news disclosure and residual short interest, suggesting that managers withhold bad news in general. This tendency is tempered when firms are exposed to higher litigation risk, and it is strengthened when managers have greater incentives to support the stock price. Based on a novel approach to identifying the presence of bad news, our study adds to the debate on whether managers tend to withhold or release bad news. Data Availability: Data used in this study are available from public sources identified in the study.

scholarly journals Are Environmentally Innovative Companies Inclined towards Integrated Environmental Disclosure Policies?

2021 ◽  
Vol 11 (1) ◽  
pp. 29
Author(s):  
Isabel-María García-Sánchez ◽  
Nicola Raimo ◽  
Filippo Vitolla
Keyword(s):  
Environmental Performance ◽  
Voluntary Disclosure ◽  
Environmental Innovation ◽  
Environmental Disclosure ◽  
Academic Field ◽  
Environmental Actions ◽  
Correct Representation ◽  
Mediating Factor ◽  
The Impact

In recent years, the correct representation of environmental performance has become increasingly important. In light of this, in the academic field, numerous researchers have examined the level and quality of environmental disclosure. However, in the context of studies relating to the determinants of environmental disclosure, little attention has been paid to the role of environmental innovation. This study, in the context of voluntary disclosure theory, aims to fill this important gap through the analysis of the impact of environmental innovation on the level of integrated environmental information disclosed by companies and the analysis of environmental performance as a mediating factor in this relationship. The results show a positive relationship between environmental innovation and integrated environmental disclosure. In addition, they show that environmental performance represents a mediating factor in this relationship. However, complementary analyses show that responsible firms adopt silent strategies in their environmental integrated disclosure policies in order to limit the knowledge by external users of the different environmental actions implemented.

Breaking Bad News — Skills and Evidence

2009 ◽  
Vol 2 (10) ◽  
pp. 605-612 ◽  
Author(s):  
Jill Thistlethwaite
Keyword(s):  
Human Immunodeficiency Virus ◽  
Communication Skills ◽  
Human Immunodeficiency Virus Status ◽  
Bad News ◽  
Breaking Bad News ◽  
Breaking Bad ◽  
Immunodeficiency Virus ◽  
The Future ◽  
The Patient’S View ◽  
The Impact

Bad or unfavorable news may be defined as ‘any news that drastically and negatively alters the patient's view of her or his future’( Buckman 1992 ). When GPs talk about breaking bad news, they usually mean telling patients that they have cancer, though in fact similar communication skills may be employed when informing patients about a positive human immunodeficiency virus status, or that a relative has died. Of key importance in the process is the doctor gaining an understanding of what the patient's view of the future is or was — the expectation that now might not be met. A doctor should not assume the impact of the diagnosis without exploring the patient's worldview.

scholarly journals Does Governance Affect Compliance with IFRS 7?

2021 ◽  
Vol 14 (6) ◽  
pp. 239
Author(s):  
Amal Yamani ◽  
Khaled Hussainey ◽  
Khaldoon Albitar
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Audit Committee ◽  
Banking Sector ◽  
Mandatory Disclosure ◽  
Disclosure Requirements ◽  
Corporate Governance Codes ◽  
Ifrs 7 ◽  
Enforcement Mechanisms ◽  
The Impact

Although there has been considerable research on the impact of corporate governance on corporate voluntary disclosure, empirical evidence on how governance affects compliance with mandatory disclosure requirements is limited. We contribute to governance and disclosure literature by examining the impact of corporate governance on compliance with IFRS 7 for the banking sector in Gulf Cooperation Council (GCC). We use a self-constructed disclosure index to measure compliance with IFRS 7. We use regression analyses to examine the impact of board characteristics, audit committee characteristics and ownership structure on compliance with IFRS 7. Using a sample of 335 bank-year observations for GCC listed banks over the period 2011–2017, we report evidence that corporate governance variables affect compliance with IFRS 7. However, the significance of these variables depends on the type of the regression model used. Our findings suggest that governance matters for mandatory disclosure requirements. So to improve the level of compliance, regulators, official authorities, and policymakers should intensify their efforts toward improving corporate governance codes, following up their implementation and enhancing the enforcement mechanisms.

The future of the management of projects in the 2030s

2019 ◽  
Vol 12 (2) ◽  
pp. 242-266 ◽  
Author(s):  
Derek Walker ◽  
Beverley Lloyd-Walker
Keyword(s):  
Project Managers ◽  
Bad News ◽  
Good News ◽  
Workplace Environment ◽  
Content Type ◽  
Routine Work ◽  
The Future ◽  
Management Project ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to explore recent literature on the impact of changes in the workplace environment and projected trends through to the year 2030. This allows the authors to identify and discuss what key trends are changing the nature of project organising work. The authors aim to identify what knowledge and which skills, attributes and experiences will be most likely valued and needed in 2030. Design/methodology/approach This paper is essentially a reflective review and is explorative in nature. The authors focus on several recent reports published in the UK and Australia that discuss the way that the future workforce will adapt and prepare for radical changes in the workplace environment. The authors focus on project organising work and the changing workplace knowledge, skills, attributes and experience (KSAE) needs of those working in project teams in 2030 and beyond. The authors draw upon existing KSAE literature including findings from a study undertaken into the KSAEs of project alliance managers working in a highly collaborative form of project delivery. Findings The analysis suggests that there is good and bad news about project workers prospects in 2030. The good news is that for those working in non-routine roles their work will be more interesting and rewarding than is the case for today. The bad news is that for workers in routine work roles, they will be replaced by advanced digital technology. Research limitations/implications Few, if any, papers published in the project organising literature speculate about what this discipline may look like or what KSAEs will be valued and needed. Practical implications This paper opens up a debate about how project management/project organising work will be undertaken in future and what skills and expertise will be required. It also prompts project managers to think about how they will craft their careers in 2030 in response to expected work environment demands. This will have professional and learning implications. Social implications The issue of the future workplace environment is highly relevant to the social context. Originality/value This paper is about a projected future some 12 years onward from today. It bridges a gap in any future debate about how project organising jobs may change and how they will be delivered in the 2030s.

scholarly journals Ownership structure and voluntary disclosure in corporate annual reports of Malaysian listed firms

2011 ◽  
Vol 8 (2) ◽  
pp. 296-312 ◽  
Author(s):  
Poh-Ling Ho ◽  
Gregory Tower
Keyword(s):  
Ownership Structure ◽  
Voluntary Disclosure ◽  
Positive Association ◽  
Institutional Ownership ◽  
Ownership Concentration ◽  
Annual Reports ◽  
Policy Makers ◽  
Listed Firms ◽  
Ownership Structures ◽  
The Impact

This paper examines the impact of ownership structure on the voluntary disclosure in the annual reports of Malaysian listed firms. The result shows that there is an increase in the extent of voluntary disclosure in Malaysian listed firms over the eleven-year period from 1996 to 2006. Ownership concentration consistently shows positive association with voluntary disclosure. Firms with higher foreign and institutional ownership have a significantly positive association with voluntary disclosure levels while firms with family ownership exhibit lower voluntary disclosure. Consistent with agency theory, different ownership structures have varied monitoring effects on agency costs and clearly influence firm’s disclosure practices. The findings provide insights to policy makers and regulators in their desire to increase transparency and accountability amidst the continual enhancement of corporate governance. The findings provide evidence that optimized ownership structure in any jurisdiction should be considered in any regulatory process that seeks to improve transparency.

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