경영자와 사외이사 간 사회적 연결관계와 보수주의

[Purpose] Due to the legal responsibility of outside directors, outside directors are expected to prefer conservative accounting compared to managers. Another reason for the preference of conservative accounting is the difference in compensation. Unlike in－house directors who receive relatively high compensation and stock options, outside directors receive relatively low compensation while having the same responsibility as in－house directors. Thus, outside directors have a relatively large incentive to maintain their reputation and avoid litigation risks by curtailing aggressive accounting. Therefore, this study aims to verify whether the level of conservatism in financial statements decreases due to the actual independence of outside directors hindered by social ties between CEO and outside directors in the board of directors. [Methodology] Based on the social network analysis method, the social ties between in－ house and outside directors due to local and academic connections was measured, and the level of accounting conservatism was measured according to Ball and Shivakumar (2008). An empirical analysis was performed using a sample of 1,441 firm－year data listed on the Korea Stock Exchange from 2012 to 2016. [Findings] The higher the social ties between CEO and outside directors, the lower the level of conservatism, and this result was robust even when the actual independence of the board was measured by the social ties within the board of directors between in－house and outside directors. [Policy Implications] Regulatory agencies that want to improve corporate governance can use the results of this study to improve the system for improving corporate governance. The results can also provide useful information for regulators to monitor financial reporting quality. This study also provides implications for investors to review financial statements and make investment decisions in consideration of the actual independence of the board.