Delegation of management authority and the level of corporate risk disclosure

Shuangcheng Sun and Xiaoyan Xiao

Finance Research Letters, 2024, vol. 63, issue C

Abstract: This study reveals that delegating more power to management tends to decrease corporate risk information disclosure. The detrimental effects of this power delegation are especially significant in companies within less marketized regions and those distanced from regulatory supervision. These findings highlight the critical role of external regulators in cultivating a robust market and legal framework. Such an environment is key to developing effective corporate charter systems that can restrain management's self-interest and ensure more transparent risk disclosure.

Keywords: Delegation of management authority; Corporate risk disclosure (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324003143

DOI: 10.1016/j.frl.2024.105284

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