IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-16-00336.html
   My bibliography  Save this article

Market reaction to Audit Committee director departures: Evidence from the post-SOX period

Author

Listed:
  • Etienne Redor

    (Audencia Business School)

Abstract

Although the Audit Committee is a key component of corporate governance, very few studies have analyzed the market reaction to the departure of an Audit Committee Director. In this paper, we study the market reaction to 90 Audit Committee Director departures between 2004 and 2014. We find no significant market reaction at either the time of a non co-opted directors' departure or at the time of a financial expert directors' departure. Conversely, we show a significant positive market reaction at the announcement of a female Audit Committee member's departure, but no significant market reaction to the announcement of a male Audit Committee member's departure.

Suggested Citation

  • Etienne Redor, 2016. "Market reaction to Audit Committee director departures: Evidence from the post-SOX period," Economics Bulletin, AccessEcon, vol. 36(3), pages 1267-1274.
    • Handle: RePEc:ebl:ecbull:eb-16-00336
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2016/Volume36/EB-16-V36-I3-P124.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Core, John E. & Holthausen, Robert W. & Larcker, David F., 1999. "Corporate governance, chief executive officer compensation, and firm performance," Journal of Financial Economics, Elsevier, vol. 51(3), pages 371-406, March.
    2. Mark L. Defond & Rebecca N. Hann & Xuesong Hu, 2005. "Does the Market Value Financial Expertise on Audit Committees of Boards of Directors?," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 43(2), pages 153-193, May.
    3. Dodd, Peter & Warner, Jerold B., 1983. "On corporate governance : A study of proxy contests," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 401-438, April.
    4. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    5. Davidson, Wallace III & Xie, Biao & Xu, Weihong, 2004. "Market reaction to voluntary announcements of audit committee appointments: The effect of financial expertise," Journal of Accounting and Public Policy, Elsevier, vol. 23(4), pages 279-293.
    6. Gul, Ferdinand A. & Srinidhi, Bin & Ng, Anthony C., 2011. "Does board gender diversity improve the informativeness of stock prices?," Journal of Accounting and Economics, Elsevier, vol. 51(3), pages 314-338, April.
    7. Kevin Campbell & Antonio Minguez Vera, 2010. "Female board appointments and firm valuation: short and long-term effects," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 14(1), pages 37-59, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Etienne Redor, 2016. "Market reaction to Audit Committee director departures: Evidence from the post-SOX period," Post-Print hal-01343678, HAL.
    2. Jimi Siekkinen, 2017. "Board characteristics and the value relevance of fair values," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(2), pages 435-471, June.
    3. Jin Sug Yang & Anna Bedford & Martin Bugeja, 2023. "Director expertise and co‐option in industry superannuation funds?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 1249-1283, April.
    4. Goh, Lisa & Gupta, Aditi, 2016. "Remuneration of non-executive directors: Evidence from the UK," The British Accounting Review, Elsevier, vol. 48(3), pages 379-399.
    5. Jamaani, Fouad, 2025. "Can female directors affect IPO withdrawal risk?," Business Horizons, Elsevier, vol. 68(3), pages 361-383.
    6. Adeel Mustafa & Abubakr Saeed & Muhammad Awais & Shahab Aziz, 2020. "Board-Gender Diversity, Family Ownership, and Dividend Announcement: Evidence from Asian Emerging Economies," JRFM, MDPI, vol. 13(4), pages 1-20, March.
    7. Quoc-Anh Do & Bang Dang Nguyen & Raghavendra- University of Cambridge, Cambridge Judge Business School) Rau, 2013. "Sugar and Spice and Everything Nice: What Are Good Directors Made of?," SciencePo Working papers Main hal-03460924, HAL.
    8. Stephen Gray & John Nowland, 2017. "The diversity of expertise on corporate boards in Australia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(2), pages 429-463, June.
    9. An, Jiafu & Duan, Tinghua & Hou, Wenxuan & Liu, Xianda, 2020. "The legacy of wars around the world: Evidence from military directors," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 64(C).
    10. Nilabhra Bhattacharya & Theodore E. Christensen & Qunfeng Liao & Bo Ouyang, 2022. "Can short sellers constrain aggressive non-GAAP reporting?," Review of Accounting Studies, Springer, vol. 27(2), pages 391-440, June.
    11. Aruoriwo Marian Chijoke-Mgbame & Agyenim Boateng & Chijoke Oscar Mgbame, 2020. "Board gender diversity, audit committee and financial performance: evidence from Nigeria," Accounting Forum, Taylor & Francis Journals, vol. 44(3), pages 262-286, July.
    12. Shahab, Yasir & Ntim, Collins G. & Ullah, Farid & Yugang, Chen & Ye, Zhiwei, 2020. "CEO power and stock price crash risk in China: Do female directors' critical mass and ownership structure matter?," International Review of Financial Analysis, Elsevier, vol. 68(C).
    13. Baghdadi, Ghasan A. & Safiullah, Md & Heyden, Mariano L.M., 2023. "Do gender diverse boards enhance managerial ability?," Journal of Corporate Finance, Elsevier, vol. 79(C).
    14. repec:spo:wpmain:info:hdl:2441/69eil0vrec871ooabetqvq0okj is not listed on IDEAS
    15. Wael Almaqoushi & Ronan Powell, 2021. "Audit committee quality indices, reporting quality and firm value," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 48(1-2), pages 185-229, January.
    16. Stephen Gray & John Nowland, 2013. "Is prior director experience valuable?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(3), pages 643-666, September.
    17. Schmid, Stefan & Altfeld, Frederic & Dauth, Tobias, 2018. "Americanization as a driver of CEO pay in Europe: The moderating role of CEO power," Journal of World Business, Elsevier, vol. 53(4), pages 433-451.
    18. Ahmadi, Ali & Nakaa, Nejia & Bouri, Abdelfettah, 2018. "Chief Executive Officer attributes, board structures, gender diversity and firm performance among French CAC 40 listed firms," Research in International Business and Finance, Elsevier, vol. 44(C), pages 218-226.
    19. repec:hal:spmain:info:hdl:2441/69eil0vrec871ooabetqvq0okj is not listed on IDEAS
    20. Jong-Min Kim & Chanho Cho & Chulhee Jun & Won Yong Kim, 2020. "The Changing Dynamics of Board Independence: A Copula Based Quantile Regression Approach," JRFM, MDPI, vol. 13(11), pages 1-21, October.
    21. Green, Colin P. & Homroy, Swarnodeep, 2018. "Female directors, board committees and firm performance," European Economic Review, Elsevier, vol. 102(C), pages 19-38.
    22. Zalata, Alaa Mansour & Tauringana, Venancio & Tingbani, Ishmael, 2018. "Audit committee financial expertise, gender, and earnings management: Does gender of the financial expert matter?," International Review of Financial Analysis, Elsevier, vol. 55(C), pages 170-183.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • G3 - Financial Economics - - Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-16-00336. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.