TY - JOUR
T1 - Busy CEOs and financial reporting quality
T2 - evidence from Indonesia
AU - Harymawan, Iman
AU - Nasih, Mohammad
AU - Rahayu, Nadia Klarita
AU - Kamarudin, Khairul Anuar
AU - Wan Ismail, Wan Adibah
N1 - Publisher Copyright:
© 2022, Emerald Publishing Limited.
PY - 2022/7/5
Y1 - 2022/7/5
N2 - Purpose: This study aims to examine the relationship between CEO busyness and financial reporting quality in a country which implements a two-tier board system. Design/methodology/approach: This study includes firms listed on the Indonesian Stock Exchange during the 2010–2018 period. This study employs an ordinary least squares regression, the propensity score matching procedure, and a Heckman two-stage regression in testing the hypothesis. Findings: This study finds that firms with busy directors have a higher financial reporting quality, and these results are robust to a battery or sensitivity analysis. The additional analyses also find that a busy CEO is negatively associated with the firm's financial reporting quality with decreasing income. Practical implications: This paper provides implications for policy-makers in the emerging market on devising policies on CEOs' appointments, especially when involving multiple directorships. Despite the general belief on the detrimental workload effects of busy directors, this study offers evidence supporting the opposite effect. Originality/value: As many previous studies focused on the effect of director busyness on firm’s performance, this study focusses on the effect of CEO busyness on financial reporting quality. To the best of our knowledge, this study is the first to investigate this issue in an emerging market.
AB - Purpose: This study aims to examine the relationship between CEO busyness and financial reporting quality in a country which implements a two-tier board system. Design/methodology/approach: This study includes firms listed on the Indonesian Stock Exchange during the 2010–2018 period. This study employs an ordinary least squares regression, the propensity score matching procedure, and a Heckman two-stage regression in testing the hypothesis. Findings: This study finds that firms with busy directors have a higher financial reporting quality, and these results are robust to a battery or sensitivity analysis. The additional analyses also find that a busy CEO is negatively associated with the firm's financial reporting quality with decreasing income. Practical implications: This paper provides implications for policy-makers in the emerging market on devising policies on CEOs' appointments, especially when involving multiple directorships. Despite the general belief on the detrimental workload effects of busy directors, this study offers evidence supporting the opposite effect. Originality/value: As many previous studies focused on the effect of director busyness on firm’s performance, this study focusses on the effect of CEO busyness on financial reporting quality. To the best of our knowledge, this study is the first to investigate this issue in an emerging market.
KW - Busy CEO
KW - Financial reporting quality
KW - Governance
KW - Multiple directorships
UR - http://www.scopus.com/inward/record.url?scp=85132569216&partnerID=8YFLogxK
U2 - 10.1108/ARA-11-2021-0203
DO - 10.1108/ARA-11-2021-0203
M3 - Article
AN - SCOPUS:85132569216
SN - 1321-7348
VL - 30
SP - 314
EP - 337
JO - Asian Review of Accounting
JF - Asian Review of Accounting
IS - 3
ER -