Conference moderator: Triza Nganga
Session 1 (Tuesday, 4:15 – 5:45 pm) - Inauguration and Keynote Address
https://us06web.zoom.us/j/89812446591
4:15 – 4:40 pm: Welcome & Inauguration of the Symposium
Harry Dombroski, University of Texas at Arlington, United States
Bin Srinidhi, Chief Editor, JCAE
Prof. Judy Tsui, Institute for New Economic Thinking, Hong Kong
4:40 pm: Keynote Speaker Introduction by Prof. Ram Venkataraman
4:45 – 5:45 pm: Keynote Address: Prof. Katherine Schipper, Duke University, United States
Session 2 (Tuesday, 6:00 – 7:30 pm) - Plenary Sessions #1 and #2
https://us06web.zoom.us/j/82009413483
6:00 – 6:45 pm: Plenary #1: Top executive gender diversity and financial reporting quality
Authors: Karel Hrazdil; Dan Simunic; Stephen Spector; Simon (Nattavut) Suwanyangyuan
Presenter: Simon Suwanyangyuan, Brock University, Ontario, Canada
Discussant: Zhifeng Yang, SUNY Stony Brook, New York
Abstract
We examine whether gender diversity of chief executive and chief financial officers (CEOs and CFOs) is associated with financial reporting quality. The CEOs and CFOs of publicly traded companies are both required to certify the appropriateness of their financial statements and annual disclosures. We argue that gender diverse dyads (groups) of executives can bring different perspectives and professional skepticism to financial reporting. Using a sample of different CEO/CFO gender dyads during 2006- 2019, we postulate and find evidence of higher accruals quality among firms led by gender-diverse dyads compared to accruals quality reported by firms led by all-male CEO/CFO pairs. Additional analyses reveal that the auditors of firms with gender diverse executive dyads issue audit reports later, charge higher audit fees, and are more likely to be one of the Big 4 firms. These findings support the view that top executive gender diversity enhances financial reporting quality, which has important implications for corporate governance mechanisms.
6:45 – 7:30 pm: Plenary #2: U.S. Airline responses to mandated disclosure of nonfinancial performance
Authors: Xiaozhe (Ben) Gu; Nandu Nagarajan; Akin Sayrak; Dhinu Srinivasan
Presenter: Xiaozhe (Ben) Gu, University of Southern Indiana, United States
Discussant: Ranjani Krishnan, Michigan State University, United States
Abstract
This paper provides evidence on US airlines’ responses to the U.S. Department of Transportation’s (DOT) mandated disclosure of non-financial performance. We find that while all three DOT measures are associated with customer complaints, airlines are more likely to improve on-time performance rather than mishandled bags and ticket over-sales following poor prior period performance. We also find that on-time performance is the only DOT measure that is associated with future accounting performance and is significantly associated with CEO compensation after controlling for financial performance and load factor. Overall, we provide new understanding of how organizations react to the disclosure of non-financial performance and use incentives to improve these measures. Our findings also have implications on how organizations view the trade-off between customer satisfaction and profitability in improving non-financial measures of performance.
Session 3 (Tuesday, 7:45 – 9:15 pm) - Concurrent Session I
https://us06web.zoom.us/j/85120346893
7:45 – 8:15 pm: The Queen Maker: Labor Unions' Support for Female Managers—Large Sample Evidence from US Establishments
Authors: Chen Chen; Xiaoxiao Yu
7:45 – 8:00 pm: Presenter: Chen Chen, Monash University, Australia
8:00 – 8:10 pm: Discussant: Hila Fogel-Yaari, University of Texas at Arlington, United States
8:10 – 8:15 pm: Q&A
Abstract
In this paper, we investigate whether labor unions play a role in supporting female leadership in the business world. Using establishment-level microdata, we show that higher labor union membership is positively associated with the likelihood of female plant managers. Further analysis reveals three potential reasons for why labor unions support female plant managers: (1) female plant managers are less likely to be associated with large-scale layoffs; (2) female plant managers prefer supporting the pro-feminist Democratic Party; and (3) unions want to achieve more female membership in the future. Last, we show that firm-level gender diversity policies have no plant-level labor union effect on female leadership.
8:15 – 8:45 pm: Killing George Floyd Changed How Mutual Fund Managers are Hired
Authors: John Adams; Long Thai Bui; Yi-Ju Chien
8:15 – 8:30 pm: Presenter: Yi-Ju Chien, University of Texas at Arlington, United States
8:30 – 8:40pm: Discussant: Hila Fogel-Yaari, University of Texas at Arlington, United States
8:40 – 8:45pm: Q&A
Abstract
This paper investigates White and Black fund manager placements and outcomes. Fund manager information is collected manually through LinkedIn profiles, firm webpages, and Google searches. Artificial intelligence algorithms and human recognition are utilized to assign gender and ethnicity race from managers’ photographs and names. Fund attributes, including returns, size, investor flows are obtained from the Morningstar database. We begin by noting Black managers are underrepresented in fund industry; 1.3% and 80.4% of managers are Black and White, respectively, over the 2018-2022 period. We find that Black managers (of both genders) on average, are more likely to earn graduate degrees, but are less likely to have professional certification/license (CFA, CFP, CPA), and have less professional experience than White managers. With respect to performance, we find that Black managers outperformed White managers before Floyd murder, but the outperformance by Black managers diminished in post-Floyd era. At the same time, we find that Black manager hiring almost doubled after Floyd death.
8:45 – 9:15 pm: Board Gender Diversity and Environmental, Social and Governance (ESG) Disclosure: Assessing the moderating role of country-level accountability
Authors: Shaista Wasiuzzaman; Effiezal Aswadi Abdul Wahab
8:45 – 9:00 pm: Presenter: Effiezal Aswadi Abdul Wahab, Curtain University, Australia
9:00 – 9:10 pm: Discussant: Fei (Phoebe) Gao, Singapore Institute of Technology, Singapore
9:10 – 9:15 pm: Q&A
Abstract
This paper investigates the relationship between board gender diversity and environmental, social, and governance (ESG) disclosure. Based on a sample of 3,456 firm-year observations from 37 countries, we find a positive relationship between board gender diversity and ESG disclosure. We extend this test by considering country-level accountability based on the World Bank database. We find that the relationship between board gender diversity and ESG disclosure is stronger for countries with a high level of accountability. The findings remain similar for countries with a high level of board efficacy. However, we find no results when we include the level of enforcement of accounting and auditing standards. Our results remain consistent for a battery of endogeneity and additional analyses.
Keywords: Board gender diversity; ESG disclosure; accountability JEL classifications: G3, G14, M14, M41
Session 4 (Tuesday, 7:45 – 9:15 pm) - Concurrent Session II
https://us06web.zoom.us/j/88194046768
7:45 – 8:15 pm: Does perception of social irresponsibility affect a firm's dividend policy?
Authors: Pascal Nguyen; Nahid Rahman; Ruoyun (Lucy) Zhao
7:45 – 8:00 pm: Presenter: Pascal Nguyen, University of Montpellier Management Institute, France
8:00 – 8:10 pm: Discussant: Jivas Chakravarthy, University of Texas at Arlington, United States
8:10 – 8:15 pm: Q&A
Abstract
This paper examines whether the reputational risk arising from media coverage of Corporate Social Irresponsibility (CSI) affects firm payout. Using US firms between 2007 and 2018, we find that firms with high reputation risk pay out more dividends and have a higher propensity of cash payout. The results support the prediction that dividend payout is used to mitigate the negative effect on reputation by signaling firms’ growth prospect and insider accountability to address the deficiency in their ESG practice. The cross-sectional analysis shows the effect of reputation risk on payout policy is stronger when firms have weak corporate governance and strong growth opportunities. We further confirm that dividend payout receives higher market valuation for companies with high reputation risks, supporting the credibility of dividend signaling. Our results are robust to using alternative payout measures and hold after addressing endogeneity concerns. Overall, we provide robust evidence that payout is used to mitigate reputation risks and media coverage plays a role in stimulating firms to behave in socially
responsible ways.
JEL classification: G14, G30, G32 Keywords: corporate reputation risks; dividend; payout; agency problems; signaling
8:15 – 8:45 pm: Determinants and Consequences of Initial COVID-Related MD&A Disclosures
Authors: Michael Etteredge; Enayet Hossain; Lili Sun; Ke Wang
8:15 – 8:30 pm: Presenter: Lili Sun, University of North Texas, United States
8:30 – 8:40pm: Discussant: Yuan Ji, University of Texas at Arlington, United States
8:40 – 8:45pm: Q&A
Abstract
This study investigates the determinants and informativeness of initial corporate MD&A content in SEC 10-K filings in response to economic uncertainty during the Coronavirus-19 pandemic (COVID). The fundamental driver of the pandemic’s downside economic risk was the threat to human health. For companies headquartered in areas with higher COVID health risks, we find that COVID-related MD&A text is shorter and less readable; the text is also more repetitive and standardized. The language used in COVID-related MD&As is more pessimistic and uncertain in high-health-risk areas. Further, a more pessimistic tone of COVID-related MD&As is associated with worse subsequent firm performance, and a higher uncertainty in the language of COVID disclosures is associated with heightened post-filing information risk. These findings suggest that, although COVID’s impetus to extreme economic uncertainty reduced the amount and clarity of disclosure, the initial COVID-related MD&A text delivered to investors was still informative. Our results should be of interest to regulators in continuing efforts to improve the usefulness of MD&As.
Keywords: COVID; MD&A; narrative disclosure; economic uncertainty; information risk
8:45 – 9:15 pm: Are PEVCs socially responsible? New insights from cross-country analyses
Authors: Amrit Panda; Soumya Guha Deb; Sankarshan Basu
8:45 – 9:00 pm: Presenter: Amrit Panda, Indian Institute of Management Sambalpur, India
9:00 – 9:15 pm: Q&A
Abstract
The current study explores the impact of PEVC investment on the social engagement activities of their portfolio companies in a cross-country setup. Using panel dataset of 3,354 firm-year observations across 17 countries from 2015 through 2020, we show that institutional investors with dominant profit-seeking motive such as PEVCs tend to have a significantly negative influence on the social engagement practices of their investee firms. The pattern remains consistent across both developed as well as emerging countries and even after controlling for firm level traits such as firm size, age, leverage, cash holdings, etc. The ‘governance quality’ of the firms seems to have a moderating effect on this association. Our results remain robust even after a series of robustness tests.
Keywords: Private equity (PE), Venture capital (VC), Social engagement
JEL: G11, G24, G32
