Dynamics of CEO Disclosure Style
Bochkay, Khrystyna, Chychyla, Roman, Nanda, Dhananjay (DJ)
The Accounting Review · 2019 · Volume 94 · Issue 4
Abstract
We examine changes in CEOs' disclosure styles in quarterly earnings conference calls over their tenure. Our longitudinal analysis of newly hired CEOs shows that CEOs' forward-looking disclosures and their disclosures' relative optimism decline in their tenure. Further, externally hired and inexperienced CEOs are more future-oriented, and younger CEOs exhibit greater optimism in their disclosures. We also find that non-CEO executives' disclosure styles remain time-invariant over their CEOs' tenure. Our evidence is consistent with uncertainty reduction about managers' ability over their tenure (1) reducing the demand for and the supply of forward-looking disclosures, and (2) attenuating managerial career concerns leading to the decline in disclosure optimism. JEL Classifications:D22; D70; D82; D83; L20; M12.
Keywords
CEO tenure, ability uncertainty, career concerns, voluntary disclosure, forward-looking information, disclosure tone, earnings conference calls
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