Working Paper
The authors examine the antecedents and implications of directors’ access to internal information. Using
proprietary data on board risk reporting practices, they document that boards receive more frequent
and comprehensive internal risk information when more board directors are independent and when
the board chair is a nonexecutive, which enables non-executive directors to have more influence on
board meeting agendas and reporting.
The authors further show that board risk reporting contributes to board effectiveness as it is negatively (positively) related to future firm risk (performance). These relations are more pronounced when analyst coverage complements internal risk reporting to complete
directors’ information mosaic.
These findings offer novel insights on the economic role of board reporting practices.
Faculty
Assistant Professor of Accounting and Control
Assistant Professor of Accounting and Control