Market reactions to the appointment of audit committee directors with financial and industry expertise in Germany

Kieback, S.; Thomsen, M.; Watrin, C.


Zusammenfassung

Several calls from practitioners and the relevant literature suggest that audit committee directors with industry expertise complement the knowledge of financial experts. Thus, this study examines market reactions to the voluntary appointment of new audit committee directors with financial and industry expertise. Using hand-collected data on newly appointed audit committee director announcements, we find a significantly positive market reaction around the appointment of financial experts with industry expertise but no reaction around the appointment of financial experts without industry expertise. Consistent with the expectation that some industries demand a higher need for specialized directors, we find a positive market reaction to the appointment of financial experts with industry expertise depending on whether the appointing firm is relatively more challenging for non-industry experts to monitor and advise. Overall, our findings suggest that market participants demand a combination of financial and industry expertise.

Schlüsselwörter
Market reaction; audit committee; industry expertise; financial expertise; corporate governance; boards of directors



Publikationstyp
Forschungsartikel (Zeitschrift)

Begutachtet
Ja

Publikationsstatus
Veröffentlicht

Jahr
2022

Fachzeitschrift
International Journal of Auditing

Band
26

Ausgabe
4

Erste Seite
446

Letzte Seite
466

Sprache
Englisch

ISSN
1090-6738

DOI

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