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image/svg+xml Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao Closed Access logo, derived from PLoS Open Access logo. This version with transparent background. http://commons.wikimedia.org/wiki/File:Closed_Access_logo_transparent.svg Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao
https://doi.org/10.2139/ssrn.4...
Article . 2024 . Peer-reviewed
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Do Benevolent Directors Influence Corporate Earnings Persistence?

Authors: Ashesha Paveena Weerasinghe; Sulochana Dissanayake;

Do Benevolent Directors Influence Corporate Earnings Persistence?

Abstract

Purpose This study aims to examine whether Benevolent directors on the board influence corporate earnings quality (EQ). The authors further investigate the roles of chief executive officer (CEO) benevolence, gender and corporate governance mechanisms in the association between board benevolence and EQ. Design/methodology/approach Drawing from upper-echelon and ethical leadership theoretical perspectives, the study hypothesizes a positive association between board benevolence and earnings persistence (EP). Director benevolence is proxied by their involvement in not-for-profit leadership positions, simultaneously to corporate directorships. EQ is proxied through EP, which is the persistence of earnings and cash flows from current to future periods. Findings The analysis reveals a positive association between board benevolence and EP using a sample of Australian capital market firms from 2010 to 2019. Second, Benevolent CEOs, women CEOs and more independent directors on boards and audit committees strengthen the board benevolence–EP association. The findings are robust to entropy balancing, residual inclusion of board benevolence and instrumental variable regressions. Research limitations/implications The authors make a novel contribution to the financial reporting literature by documenting that the personal moral characteristics of corporate leaders, particularly those of the board of directors, significantly influence EQ. Originality/value The originality of the paper lies in viewing board composition through an understudied yet instrumental perspective: board benevolence. The findings will be insightful for policymakers seeking to enhance the quality of information in capital markets and for investors evaluating the financial information of firms.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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