Work

Does Independent Directors' Participation Matter in Interactive Information Exchange? Evidence from Earnings Communication Conferences in China*

Year: 2026

Type: article

Abstract: The study examines how independent directors’ (IDs’) participation in earnings communication conferences (ECCs) influences the quality of investor‐management interactions. Using question‐and‐answer transcripts from Chinese ECCs, we construct a multidimensional measure of interaction quality that incorporates semantic relevance (via Sentence‐BERT embeddings), response readability, and information content. We find that IDs' participation significantly enhances interaction quality. Mechanism analyses suggest that this effect operates through diligence signaling, real‐time oversight, and reputational incentives. The enhancement is more pronounced when IDs are female, younger, have longer tenure, or hold fewer concurrent directorships. Moreover, the marginal benefit is greater when multiple IDs attend the ECC. Finally, we show that IDs' participation amplifies the positive capital market reaction to high‐quality interactions. These findings highlight the critical role of IDs in promoting effective interactive information exchange.

Source: Asia-Pacific Journal of Financial Studies

DOI: 10.1111/ajfs.70033

Authors: Jingxin Li, Yong Ye

Institution: Southwest Jiaotong University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: bronze

Funder: Humanities and Social Science Fund of Ministry of Education of China

Award: G2752900795