Journal article
Financial fraud, director reputation, and shareholder wealth
Journal of financial economics, v 86(2), pp 306-336
2007
Abstract
We investigate the reputational impact of financial fraud for outside directors based on a sample of firms facing shareholder class action lawsuits. Following a financial fraud lawsuit, outside directors do not face abnormal turnover on the board of the sued firm but experience a significant decline in other board seats held. This decline in other directorships is greater for more severe allegations of fraud and when the outside director bears greater responsibility for monitoring fraud. Interlocked firms that share directors with the sued firm also exhibit valuation declines at the lawsuit filing. Fraud-affiliated directors are more likely to lose directorships at firms with stronger corporate governance and their departure is associated with valuation increases for these firms.
Metrics
Details
- Title
- Financial fraud, director reputation, and shareholder wealth
- Creators
- Eliezer M. Fich - Drexel UniversityAnil Shivdasani - University of North Carolina at Chapel Hill
- Publication Details
- Journal of financial economics, v 86(2), pp 306-336
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000250689900003
- Scopus ID
- 2-s2.0-34848841525
- Other Identifier
- 991019169689204721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance
- Economics