Do Independent Director Departures Predict Future Bad Events?

• 成果类型: Article
• 署名作者: Fahlenbrach, Rudiger; Low, Angie; Stulz, Rene M.
• 署名单位: Swiss Finance Institute (SFI); Swiss Federal Institutes of Technology Domain; Ecole Polytechnique Federale de Lausanne; Nanyang Technological University; University System of Ohio; Ohio State University; National Bureau of Economic Research
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhx009
• 发表日期: 2017
• 页码: 2313
• 关键词: CEO TURNOVER; instrumental variables; career concerns; Firm value; performance; boards; incentives; reputation; OWNERSHIP; returns

摘要

Following surprise independent director departures, affected firms have worse stock and operating performance, are more likely to restate earnings, face shareholder litigation, suffer from an extreme negative return event, and make worse mergers and acquisitions. The announcement returns to surprise director departures are negative, suggesting that the market infers bad news from surprise departures. We use exogenous variation in independent director departures triggered by director deaths to test whether surprise independent director departures cause these negative outcomes or whether an anticipation of negative outcomes is responsible for the surprise director departure. Our evidence is more consistent with the latter.