The nature of voluntary disclosure around CEO change and types of CEO departure and succession.

摘要

This study examines whether the positive or negative news nature of firms' voluntary disclosures around their CEO changes is related to the timing of disclosures (before and after CEO changes), types of CEO departure (voluntary and involuntary), and types of CEO succession (from inside or outside). It is possible that departing CEO's incentives for voluntary disclosures are different from new CEO's, so that the nature of voluntary disclosures is likely different between before and after CEO change. In addition, departing CEO's incentives to provide voluntary disclosures may also depend upon whether he leaves voluntarily or involuntarily, and new CEO's incentives may depend upon whether he is from inside or outside of the firms. The results show that the sample firms are more likely to disclose positive news before CEO change than after, and negative news after CEO change than before. The voluntary disclosure of positive news before CEO change is more likely when old CEOs leave involuntarily than when they leave voluntarily. However, the likelihood of the voluntary disclosure of negative news after CEO change is not reliably related to types of departure. Also, the nature of voluntary disclosure after CEO change is at best marginally related to types of CEO succession, from inside or outside. Taken together, the results suggest that the potential conflict of interests between departing and new CEOs affects firms' voluntary disclosure policies. The types of old CEO's departure affect firms' voluntary disclosures, while the types of new CEO's succession has little effect on voluntary disclosures.