Time: 23 December 2021 (Thursday) 14:30-16:00 pm
Tencent Conference Number: 737 443 126
Speaker: Associate Professor Cao Feng, Hunan University
Presenter's profile.
Associate Professor, Doctoral Supervisor, Head of Financial Management Department, School of Business Administration, Hunan University. He is currently a member of the Council of the Chinese Society of Business Accounting, a member of the Academic Committee of Finance Research, the Deputy Secretary General of the Hunan Business Administration Society, a member of the Hunan Society of Systems Engineering and Management, and a "Yuelu Scholar" of Hunan University. He has been awarded the honours of "Demonstration Post of Young Teaching Staff in Hunan Province", "Excellent Communist Party Member in Hunan Education System", "Young Backbone Teacher in Hunan General University" and "Young Post Leader in Changsha City". His research area focuses on financial management and capital market, and has been published in SSCI journals such as Journal of Business Finance & Accounting, Journal of Corporate Finance, Journal of Business Ethics, as well as domestic high-level journals such as Management World, Finance Research and Accounting Research. He has published more than 30 papers in high level Chinese journals such as Management World, Finance Research and Accounting Research. He has served as an anonymous reviewer for several SSCI and CSSCI journals such as Journal of Corporate Finance and Management World. He has chaired two projects of the National Natural Science Foundation of China, one project of the China Postdoctoral Science Foundation, one project of the Natural Science Foundation of Hunan Province, and one project of the Central Universities Basic Scientific Research Business Fund. He has participated in two major projects and one key project of the National Social Science Foundation of China and more than ten other projects at national and provincial levels.
Brief report content.
Are rookie independent directors (rookie independent directors), who lack board experience and are first-time sole directors, less independent and less experienced in their practice leading to ineffective oversight, or are they more motivated to build their reputation and more independent making oversight more effective? This paper explores these questions by looking at the risk of share price collapse, which has a significant impact on capital markets and investors and is a more comprehensive indicator of the effectiveness of novice independent director oversight. It is found that rookie sole directors exacerbate the risk of share price crashes, a finding that holds true after controlling for a range of individual director characteristics and endogeneity. Further, the positive effect of rookie sole directors on share price crash risk is attenuated when they have industry expertise, are less busy, have an academic background, have overseas experience and face a more stringent rule of law environment. Mechanistic tests suggest that (1) rookie sole directors are less likely to dissent, although they participate more actively in board meetings, and (2) rookie sole directors increase the risk of share price collapse by reducing the readability of annual reports and increasing financial restatements. On the one hand, this study enriches the literature on rookie sole directors and share price crash risk; on the other hand, it has implications for a deeper understanding of the governance behaviour and effectiveness of rookie sole directors, improving the sole director selection mechanism, and promoting the stable and healthy development of the capital market.
(Organised by: Department of Accounting, Research and Academic Exchange Centre)
