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Managing Reputation: Evidence from Biographies of Corporate Directors

By: Ian D. Gow, Aida Sijamic Wahid and Gwen Yu
  • Format:Print
  • | Language:English
  • | Pages:55
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Abstract

We examine how corporate directors manage reputation through disclosure choices in biographies in proxy statements filed with the SEC. Directors are more likely to withhold information about directorships at firms that experienced adverse events. Withholding such information is associated with more favorable stock price reactions at appointment and loss of fewer subsequent directorships. Nondisclosure of directorships is significantly reduced following changes to SEC rules, with the greatest change being for adverse-event directorships. These findings suggest that reputation concerns of corporate directors lead to strategic disclosure choices that have real consequences in both capital and labor markets.

Keywords

Director Monitoring; Strategic Disclosure; Management; Corporate Disclosure; Reputation

Citation

Gow, Ian D., Aida Sijamic Wahid, and Gwen Yu. "Managing Reputation: Evidence from Biographies of Corporate Directors." Harvard Business School Working Paper, No. 17-029, October 2016.

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