What Do Independent Directors Know? Evidence from Their Trading

• 成果类型: Article
• 署名作者: Ravina, Enrichetta; Sapienza, Paola
• 署名单位: Columbia University; Northwestern University; National Bureau of Economic Research
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhp027
• 发表日期: 2010
• 页码: 962
• 关键词: CORPORATE GOVERNANCE; performance; incentives; boards

摘要

We compare the trading performance of independent directors and other executives. The findings reveal that independent directors earn positive substantial abnormal returns when they purchase their company stock, and that the difference from the same firm's executives is relatively small at most horizons. We also find that executives and independent directors make higher returns in firms with the weakest governance, the gap between these two widens in such firms, and that independent directors sitting on the audit committee earn higher returns than other independent directors at the same firm. Independent directors also earn significantly abnormal returns when they sell the company stock in a window before bad news and around earnings restatements. (JEL G3, G34, K22)