Strangers on the board
| Autor: | Reggy Hooghiemstra, Trond Randøy, Niels Hermes, Lars Oxelheim |
|---|---|
| Přispěvatelé: | Research programme I&O, Research programme EEF |
| Jazyk: | angličtina |
| Rok vydání: | 2019 |
| Předmět: |
Linguistic relativity
media_common.quotation_subject AGENCY Audit committee Principal–agent problem DIVERSITY LANGUAGE Accounting DETERMINANTS CEO COMPENSATION Earnings management CORPORATE GOVERNANCE 0502 economics and business Agency (sociology) QUALITY Quality (business) Agency theory Business and International Management media_common Marketing Foreign board members AUDIT COMMITTEE Executive compensation business.industry Corporate governance 05 social sciences Board diversity PERFORMANCE Internationalization Nordic countries DIRECTORS 050211 marketing business 050203 business & management Finance |
| Zdroj: | International Business Review, 28(1), 119-134. ELSEVIER SCIENCE BV |
| ISSN: | 0969-5931 |
| Popis: | The internationalization of firms has led to boards becoming more international as well. In this study, we investigate the consequences of board internationalization. In particular, by drawing on research on language and board dynamics, we identify theory-based reasons why board internationalization could increase, or decrease, earnings management practices. We use agency theory, stressing how board internationalization may positively or negatively affect monitoring quality of boards. Next to agency theory, we use theories explaining how language differences in the boardroom complicates communication and how differences in language structures (referred to as linguistic relativity in the literature) affect directors’ perception and detection of earnings management practices. Using a sample of 3249 firm-year observations representing 586 non-financial listed Nordic firms during 2001–2008, we find that the presence of non-Nordic foreign directors on the board is associated with significantly higher levels of earnings management. Our analysis indicates that this effect is driven by language-related factors, as well as by the level of foreign board members’ accounting knowledge. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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