Are supervisory activities of independent directors under effective supervision of media? Evidence from board voting records in China

ABSTRACT

Given the role of media as a crucial institutional factor in corporate governance, this study explores the impact of media on independent directors’ voting decisions. With the availability of voting records, we conduct both firm- and director-level analyses and find that media exposure prompts independent directors to fulfill supervisory duties. An additional analysis reveals a negative moderating effect of director compensation. We also find that dissent triggers unplanned departures, after which the remaining and newly appointed independent directors are less sensitive to media attention. These findings provide evidence supporting a specific channel through which media influences corporate governance.

KEYWORDS:

• Independent director
• media exposure
• dissent
• compensation
• unplanned departure

Acknowledgments

This work was supported by the [‘111’ project funded by the Ministry of Education of China and the State Administration of Foreign Experts Affairs of China] under Grant [number B18043].

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Higher Education Discipline Innovation Project [B18043].