Ownership type,legal system evolution and their interaction significantly affect the incentives and behaviors of independent directors.We use the 2019 Securities Law revision as an exogenous shock to examine how stat...Ownership type,legal system evolution and their interaction significantly affect the incentives and behaviors of independent directors.We use the 2019 Securities Law revision as an exogenous shock to examine how state-owned enterprises(SOEs)versus non-SOEs and their independent directors respond to variations in regulatory compliance risk.Following the revision,SOEs are more likely to purchase directors’and officers’liability insurance to provide job security for independent directors.Non-SOEs are more likely to compensate for independent directors’fulfillment risk by increasing salaries and their independent directors are more likely to resign to avoid litigation risk.The coping strategies for SOEs,non-SOEs and independent directors are dynamic under different compliance risk stages and are affected by firm-level and director-level characteristics.展开更多
基金support of the Guangdong Basic and Applied Basic Research Foundation(Grant No.2023A1515010802)the Guangdong Province Universities and Colleges Pearl River Scholar Funded Scheme 2019 and the National Natural Science Foundation of China(NSFC Grant No.72132010)。
文摘Ownership type,legal system evolution and their interaction significantly affect the incentives and behaviors of independent directors.We use the 2019 Securities Law revision as an exogenous shock to examine how state-owned enterprises(SOEs)versus non-SOEs and their independent directors respond to variations in regulatory compliance risk.Following the revision,SOEs are more likely to purchase directors’and officers’liability insurance to provide job security for independent directors.Non-SOEs are more likely to compensate for independent directors’fulfillment risk by increasing salaries and their independent directors are more likely to resign to avoid litigation risk.The coping strategies for SOEs,non-SOEs and independent directors are dynamic under different compliance risk stages and are affected by firm-level and director-level characteristics.
