Corporate governance, corporate disclosure of governance related information, financial reporting, director labor market, and textual analysis
Understanding heterogeneous board busyness: determinants and implications (dissertation)
Abstract: I examine the determinants and consequences of board busyness. Regarding determinants, I find that board busyness decreases with firms’ monitoring demand and increases with their advising demand. I also find that agency problems and labor market frictions are associated with greater board busyness. Further, firms with high advising and low monitoring demands tend to adopt more lenient policies governing director busyness. To examine implications, I separate board busyness into the demand-based component (explained by firms’ combined advising and monitoring demand), the overboarding component (explained by agency problems and labor market frictions), and the remaining unexplained component. I find consistently positive associations between the demand-based component and firm performance. In contrast, the association between the overboarding component and firm performance is negative. Finally, I exploit negative shocks to busyness at director-interlocked firms induced by M&A activity. I find that the effect of these negative shocks on director-interlocked firms’ performance decreases with firms’ advising demand and increases with firms’ monitoring demand. Collectively, the results suggest that the composition of board busyness, not its level per se, has important performance implications. My findings do not support one-size-fits-all limits on board busyness.
Beyond duality: an analysis of alternative board leadership structures (co-authored paper)
Abstract: Our study examines the leadership structures of corporate boards for publicly traded companies. Using a broad sample of firms over 2003–2016, we find evidence of wide variation in leadership structures. We document that 49% of firms are led either by a dual CEO-chair or a CEO and an independent chair while the remaining adopt alternative structures: dual CEO-chair with a lead independent director, CEO and an affiliated chair, and CEO and an affiliated chair with a lead independent director. Rather than shifting directly from a dual CEO-chair to having an independent board chair, firms appear to transition to an independent lead director first as a compromise solution with institutional investors. We also document that the choice of board leadership structure is associated with other governance mechanisms as well as firm characteristics including firm age, information environment, and performance. However, we do not find evidence that the board leadership structure is associated with future firm performance once we control for the determinants. Collectively, the results suggest that firms tend to adopt the leadership structures that maximize firm value specific to firm characteristics and operating environment.
The role of linguistic style in successor CEO selection after accounting restatements (co-authored paper)
Abstract: We examine whether the linguistic style of successor CEO signals a firm’s effort to restore damaged reputation following an accounting restatement. Applying a new measure of language cohesion (i.e., Coh-Metrix measures) on earnings conference call transcripts, we find that restatement firms are more likely to appoint a successor CEO with a linguistic style that conveys high integrity than non-restatement firms. Further, naming a successor CEO with high language cohesion results in a decrease in the short-term cost of capital, consistent with the notion that linguistic style signals firm’s effort to restore its reputation damaged from an accounting restatement. The linguistic style that conveys high integrity of the successor CEO is also associated with long-term benefits such as a lower long-term cost of capital, higher subsequent ROA, and Tobin’s Q. Collectively, the findings suggest that restatement firms can benefit from choosing a successor CEO with a linguistic style that conveys high integrity.
The efficacy of annual shareholder meetings: evidence from meeting transcripts (in the data analysis phase)
The determinants and consequences of corporate governance disclosure: evidence from SEC proxy disclosure enhancement regulation (in the data analysis phase)
Optimal Pricing Model for Perishable Commodities and its Particle Swarm Optimization Solution with Peng Tian and Zhiyou Tian, Computer Engineering and Applications, (2005) 41(4)
A New Method for Consistency Improving in the AHP with Possibility satisfiability Degree with Peng Tian and Zhiyou Tian, Proceedings of 2004 International Conference on Management Science & Engineering, Harbin, China, 2004 (ISTP),(2)
Evaluation on the Multivariate Process Capability of Suppliers based on the Process Entropy with Peng Tian and Zhiyou Tian, Proceedings of 2004 International Conference on Management Science & Engineering, Harbin, China, 2004 (ISTP),(2)