The Impact of Tightly-Contested Governance Proposals on Firms’ Narrative Disclosures: Evidence from a Regression-Discontinuity Design
Abstract: Corporate governance and firm disclosure are endogenously determined. We exploit locally exogenous variations in corporate governance created by “close-call” governance-related shareholder proposals, using a fuzzy RDD and text analytics to examine whether better corporate governance causally affects the narratives in corporate disclosures. We find that although better corporate governance in firms leads to more disclosure in their 10-K filings, the passage of “close-call” governance proposals also significantly increases the complexity and the boilerplate nature of such disclosures. These results are robust to several robustness tests, alternative RDD bandwidths, and different specifications, and amplified when the investors are undistracted.
Speaker: Abhishek Ganguly, The University of Oklahoma
Abhishek Ganguly is interested in theoretically motivated causal questions in a corporate setting, with an emphasis on the role of institutional investors, biased managers and corporate disclosures. He has presented his papers at top conferences such as the American Finance Association, European Finance Association, Society for Financial Studies Cavalcade, and Financial Management Association (FMA). His work has received several awards, including Best Paper from Southwestern Finance Association 2019, Outstanding Doctoral Student Paper Award from Southern Finance Association 2019, and Best Paper Award Semi-Finalist (Corporate Finance) from FMA (2019, 2020). He holds a Ph.D. in finance from Indiana University and an MBA from the University of Pittsburgh. (https://www.ou.edu/price/finance/faculty/abhishek-ganguly)