INTERLOCKED BOARDS OF DIRECTORS, CORPORATE GOVERNANCE, AND EARNINGS QUALITY

10.6293/AQAFA.202212_(19).0008

Justin Mindzak

Board Interlocks ； Corporate Governance ； Voluntary Disclosures ； Earnings Quality

Advances in Quantitative Analysis of Finance and Accounting

19期（2022 / 12 / 31）

287 - 327

英文

This paper studies the effects of interlocked boards of directors on voluntary governance disclosures, governance practices, and earnings quality. The Canadian environment, where director interlocks are prevalent, is examined. A checklist of 20 voluntary disclosure measures from proxy statements is developed and a direct measure of interlocking directorships is employed. I find that interlocked boards of directors are negatively associated with voluntary governance disclosures and positively associated with earnings quality. From an accounting perspective, greater earnings quality provides evidence that regulator rules and policies limiting interlocks may be unnecessary.

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