Are Qualified and Experienced Outside Directors Willing to Join Fraudulent Firms and If So, Why?

• 成果类型: Article
• 署名作者: Ghannam, Samir; Bugeja, Martin; Matolcsy, Zoltan P.; Spiropoulos, Helen
• 署名单位: University of Technology Sydney
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-52195
• 发表日期: 2019
• 页码: 205-227
• 关键词: accounting restatements; information-content; audit committees; corporate; reputation; expertise; CONSEQUENCES; incentives; LITIGATION; COMPENSATION

摘要

We investigate whether qualified and experienced directors are willing to join firms following the revelation of financial fraud. Specifically, we focus on directors with prior board experience and accounting and legal experts. We find that, notwithstanding the tarnished reputation of fraudulent firms and a higher workload, qualified and experienced directors join the boards of such firms. Subsequent to joining fraudulent firms, directors are rewarded with additional future board seats and benefit from higher compensation. We rule out alternative explanations and verify the robustness of the results by performing a variety of tests, including propensity score matching and difference-in-differences analysis.