Financial Fraud, Director Reputation, and Shareholder Wealth

  title={Financial Fraud, Director Reputation, and Shareholder Wealth},
  author={Eliezer M. Fich and A. Shivdasani},
  journal={Journal of Financial Economics},
  • Eliezer M. Fich, A. Shivdasani
  • Published 2007
  • Business
  • Journal of Financial Economics
  • We investigate the reputational impact of financial fraud for outside directors based on a sample of firms facing shareholder class action lawsuits. Following a financial fraud lawsuit, outside directors do not face abnormal turnover on the board of the sued firm but experience a significant decline in other board seats held. This decline in other directorships is greater for more severe allegations of fraud and when the outside director bears greater responsibility for monitoring fraud… CONTINUE READING
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