COVID-19, Board of Directors and Pessimism in Annual Reports: An Intention to Mitigate Litigation Risk
International Journal of Finance and Economics, ISSN: 1099-1158
2024
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Example: if you select the 1-year option for an article published in 2019 and a metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019. If you select the 3-year option for the same article published in 2019 and the metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019, 2018 and 2017.
Citation Benchmarking is provided by Scopus and SciVal and is different from the metrics context provided by PlumX Metrics.
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Data on COVID-19 Described by Researchers at University of Glasgow (Covid-19, Board of Directors and Pessimism In Annual Reports: an Intention To Mitigate Litigation Risk)
2024 DEC 16 (NewsRx) -- By a News Reporter-Staff News Editor at NewsRx COVID-19 Daily -- Data detailed on Coronavirus - COVID-19 have been presented.
Article Description
This study examines the impact of corporate COVID-19 disclosure on the negative tone (pessimism) in annual reports. We also investigate how board size and board independence influence pessimism in annual reports. Using a U.K. sample from 2020, we employ various techniques to explore the COVID-19 disclosure-pessimism nexus. Our findings, supported by Tobit regression and a two-stage least squares (2SLS) model, reveal a positive association between COVID-19 disclosure and pessimism in annual reports. We observe that managers tend to disclose COVID-19 information pessimistically as a risk mitigation strategy, aiming to prevent future earning shocks and potential litigation costs. Interestingly, our results also indicate that large boards and independent directors can bolster governance power, safeguarding firms against potential litigation costs by increasing pessimism in annual reports, both during and beyond the COVID-19 pandemic.
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