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Do specialized board committees impact the transparency of corporate political disclosure? Evidence from S&P 500 companies

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  • DeBoskey, D.G.
  • Luo, Yan
  • Wang, Jeff J.

Abstract

This study examines how the specific attributes of one type of voluntary corporate governance mechanism, a specialized political contribution committee, improves the transparency of corporate political disclosure (CPD). The results demonstrate that the existence of a committee that establishes and reviews key political activities and disclosure policies, particularly one composed entirely of outside directors, significantly enhances the transparency of corporate political disclosure, and reveal that an under-studied board committee, the political contribution committee, effectively improves CPD transparency. The results are consistent with agency theory and further support the more generalizable idea that specialized governance mechanisms (e.g., a political contribution committee) and fully independent committees lead to more transparent disclosure. Finally, the results suggest that the existence of a political contribution committee and committee independence are channels to improve CPD transparency. Public-policy makers and regulators seeking to enhance CPD transparency might consider implementing regulations that mandate or recommend these governance mechanisms as best practice.

Suggested Citation

  • DeBoskey, D.G. & Luo, Yan & Wang, Jeff J., 2018. "Do specialized board committees impact the transparency of corporate political disclosure? Evidence from S&P 500 companies," Research in Accounting Regulation, Elsevier, vol. 30(1), pages 8-19.
    • Handle: RePEc:eee:reacre:v:30:y:2018:i:1:p:8-19
    DOI: 10.1016/j.racreg.2018.03.002
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