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Are Corporate General Counsels in Top Management Effective Monitors? Evidence from Stock Price Crash Risk

Version 2 2024-06-04, 06:54
Version 1 2020-07-02, 15:41
journal contribution
posted on 2024-06-04, 06:54 authored by MD Al Mamun, B Balachandran, HN Duong, Ferdinand GulFerdinand Gul
© 2020, © 2020 European Accounting Association. We find that firms with a top management counsel (TMC) have lower stock price crash risk than other firms. We further show that firms with a TMC issue more negative relative to positive earnings guidance and use more negative relative to positive words in their annual report filings, compared to firms without a TMC. TMCs are more effective in mitigating crash risk when they serve on the board. Our findings support the monitoring role of TMCs in mitigating bad news hoarding, which, in turn, contributes to the reduction in crash risk.

History

Journal

European Accounting Review

Volume

30

Pagination

405-437

Location

Abingdon, Eng.

ISSN

0963-8180

eISSN

1468-4497

Language

English

Publication classification

C1 Refereed article in a scholarly journal

Issue

2

Publisher

ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD