Accountability of Independent Directors - Evidence from Firms Subject to Securities Litigation

摘要: We examine which independent directors are held accountable when investors sue firms for financial and disclosure related fraud. Investors can name as defendants in lawsuits, they vote against their re-election to express displeasure over the directors’ ineffectiveness at monitoring managers. In a sample of securities class-action lawsuits from 1996 2010, about 11% named defendants. The likelihood being is greater audit committee members who sell stock during class period. Named receive more negative recommendations Institutional Shareholder Services (ISS), proxy advisory firm, significantly votes shareholders than benchmark sample. They also likely other leave sued firms. Overall, use litigation along with director elections retention hold some others experience