대규모기업집단 소속기업의 이사회 특성과 공시 빈도 사이의 관계

This study investigates the association between the superiority of the corporate governance mechanism measured by board characteristics and the frequency of information disclosed through the fair disclosure system. Among various ways to measure the superiority of the corporate governance mechanism, this study specifically focuses on the characteristics of the corporate board, because the board is the highest and most important mechanism to influence corporate behaviors. Corporate insiders and controlling shareholders have incentives to pursue their private interests (Claessens et al. 2000) by transferring wealth from minority shareholders to themselves. In such a case, the interests of minority shareholders are sacrificed. Because minority shareholders are aware of this kind of risk, they are reluctant to make an investment in firms dominated by corporate insiders and majority shareholders. To persuade those minority shareholders that the firm is protecting the interests of minority shareholders and thus attract them to invest in the firm, insiders and majority shareholders need to establish a good corporate governance mechanism (Kwon et al. 2011), especially a board of directors. As a result, if the board functions effectively and efficiently to monitor the behavior of corporate insiders and majority shareholders, it is expected that the firm release various information to outsiders to guide their decision making. As a result, it is expected that there exists a positive association between a superior governance mechanism (i.e., an effective board) and the frequency of information disclosure (Lee and Sohn 2005). With 1,023 firm-year observations collected from Korean listed firms belonging to large business groups over the period from 2003 to 2008, this study empirically examines this prediction. Specifically, this study classifies the characteristics of the board into the following five broad categories. The first characteristic is the independence of the board, which is measured by (1) the ratio of independent board members (Chen and Jaggi 2000; Eng and Mak 2003), (2) the ratio of gray directors who are former employees of the firm or other related firms (Choi et al. 2008), and (3) the existence of a chairman of the board who is one of the independent outside board members. The second characteristic is the competency or expertise of the board, which is measured by (1) the existence of board members who also serve on other companies’ boards (Carcello and Neal 2003) and (2) the existence of independent board members who are experts in accounting / taxation (Srinivasan 2005). The third characteristic is the diligence of the board, which is measured by the ratio of outside directors’ attendance at board meetings (Choi and Lim 2009; Moon et al. 2006). The fourth characteristic is the establishment of an audit committee. It is well documented that an audit committee plays an important role in promoting the quality of financial reporting (Kwon et al. 2011). Finally, this study measures the other characteristics of the board by (1) the size of the board (Klein 2002; Xie et al. 2003), (2) the frequency of board meetings, and (3) the introduction of a cumulative voting or written ballot system (LaPorta et al. 1999). We perform multiple regression analyses with the test variables mentioned above and other various control variables that are likely to affect the frequency of information disclosures. Especially, we control for another important governance-related characteristic: the ownership structure. We include foreign and management shareholdings as well as ownership divergence (ownership wedge) measured by the difference between cash flow rights and voting rights of the majority shareholder (Kwon et al. 2011; Lee and Sohn 2005). Thus, this study specifically focuses on the characteristics of the board after controlling for ownership structure. The empirical findings are summarized as follows. First, we find that the ratio of independent (gray) directors is positively (negatively) associated with the frequency. Second, the governance expertise (i.e., the proportion of directors who held director positions on other firms’ boards and the existence of outside board members who are experts in accounting or tax) is positively associated with the frequency. Third, firms with an established audit committee tend to release more information. Finally, the firms with cumulative voting or written ballot systems are likely to disclose more information. These results generally support the prediction that firms with a superior governance mechanism tend to release more information to protect minority shareholders. Using exploratory principal component analysis, we confirm our results. We employ this method to summarize several governance characteristics into reduced dimensions. In addition, the results of various sensitivity analyses are also consistent in general. The findings of this study are expected to provide valuable insights to regulators, academics, practitioners, and investors. We expect future research should turn its attention to the quality of disclosure as well as the quantity.