Managers and investors responses to media exposure of board ineffectiveness

Jennifer R. Joe, Henock Louis, Dahlia Robinson

Research output: Contribution to journalArticlepeer-review

164 Scopus citations


We analyze the impact of the press on the behavior of various economic agents by examining how media exposure of board ineffectiveness affects corporate governance, investor trading behavior, and security prices. Our focus on board quality is motivated by the strong media criticism to which corporate boards and corporate America, in general, have been recently subjected. The results indicate that media releases of (noisy) information have significant economic consequences. In particular, media exposure of board ineffectiveness forces the targeted agents to take corrective actions and enhances shareholder wealth. Individual investors appear to react negatively to the media exposure, whereas investment firms act as if they anticipate the targeted firms corrective actions.

Original languageEnglish (US)
Pages (from-to)579-605
Number of pages27
JournalJournal of Financial and Quantitative Analysis
Issue number3
StatePublished - Jun 2009

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


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