Busy CEOs and financial reporting quality: evidence from Indonesia
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 empl...
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Emerald Group Holdings Ltd.
2022
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2-s2.0-85132569216 Harymawan I.; Nasih M.; Rahayu N.K.; Kamarudin K.A.; Wan Ismail W.A. Busy CEOs and financial reporting quality: evidence from Indonesia 2022 Asian Review of Accounting 30 3 10.1108/ARA-11-2021-0203 https://www.scopus.com/inward/record.uri?eid=2-s2.0-85132569216&doi=10.1108%2fARA-11-2021-0203&partnerID=40&md5=374500abd712c826f2741975c0d40f7d 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. © 2022, Emerald Publishing Limited. Emerald Group Holdings Ltd. 13217348 English Article All Open Access; Green Open Access |
author |
Harymawan I.; Nasih M.; Rahayu N.K.; Kamarudin K.A.; Wan Ismail W.A. |
spellingShingle |
Harymawan I.; Nasih M.; Rahayu N.K.; Kamarudin K.A.; Wan Ismail W.A. Busy CEOs and financial reporting quality: evidence from Indonesia |
author_facet |
Harymawan I.; Nasih M.; Rahayu N.K.; Kamarudin K.A.; Wan Ismail W.A. |
author_sort |
Harymawan I.; Nasih M.; Rahayu N.K.; Kamarudin K.A.; Wan Ismail W.A. |
title |
Busy CEOs and financial reporting quality: evidence from Indonesia |
title_short |
Busy CEOs and financial reporting quality: evidence from Indonesia |
title_full |
Busy CEOs and financial reporting quality: evidence from Indonesia |
title_fullStr |
Busy CEOs and financial reporting quality: evidence from Indonesia |
title_full_unstemmed |
Busy CEOs and financial reporting quality: evidence from Indonesia |
title_sort |
Busy CEOs and financial reporting quality: evidence from Indonesia |
publishDate |
2022 |
container_title |
Asian Review of Accounting |
container_volume |
30 |
container_issue |
3 |
doi_str_mv |
10.1108/ARA-11-2021-0203 |
url |
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85132569216&doi=10.1108%2fARA-11-2021-0203&partnerID=40&md5=374500abd712c826f2741975c0d40f7d |
description |
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. © 2022, Emerald Publishing Limited. |
publisher |
Emerald Group Holdings Ltd. |
issn |
13217348 |
language |
English |
format |
Article |
accesstype |
All Open Access; Green Open Access |
record_format |
scopus |
collection |
Scopus |
_version_ |
1818940559953231872 |