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Voluntary Disclosure Transparency and Corporate Governance
Andrew J Felo,
Penn State Great Valley
ABSTRACT. In an effort to enhance the quality of firm disclosures, regulators have taken actions to force corporate boards to alter the composition of their audit committees. My results indicate that board composition and whether the CEO is also chairman of the board are more relevant to voluntary disclosure transparency than is audit committee composition. I find that insider board participation is related to less transparent disclosures. Contrary to expectations, however, having the same person fill the CEO and chairman roles is related to greater voluntary disclosure transparency. My results indicate that splitting the role of CEO and chairman may not improve the transparency of corporate disclosures, but reducing the role insiders play on boards may.
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