{"title":"Governance and the Decision to Issue a Profit Warning","authors":"Claude Francoeur, R. Labelle, Isabelle Martinez","doi":"10.2139/SSRN.1159465","DOIUrl":null,"url":null,"abstract":"The theoretical concept of agency costs developed by Jensen and Meckling (1976) and Jensen (2005) are used to study the assumed relationship between the quality of a firm's governance and its decision to issue a profit warning (PW), when it is overvalued. Based on a sample of Canadian companies between 2000 and 2004, results only partially support our hypotheses. The characteristics of the board seem to only play a secondary role in the decision to issue a profit warning when the firm is overvalued. Nonetheless, as expected, our study reveals the negative impact on the profit warning decision of the governance mechanisms based on market values that aim at aligning the interest of the managers and directors with those of the shareholders.","PeriodicalId":302242,"journal":{"name":"PSN: Regulation (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2008-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"10","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"PSN: Regulation (Topic)","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/SSRN.1159465","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 10
Abstract
The theoretical concept of agency costs developed by Jensen and Meckling (1976) and Jensen (2005) are used to study the assumed relationship between the quality of a firm's governance and its decision to issue a profit warning (PW), when it is overvalued. Based on a sample of Canadian companies between 2000 and 2004, results only partially support our hypotheses. The characteristics of the board seem to only play a secondary role in the decision to issue a profit warning when the firm is overvalued. Nonetheless, as expected, our study reveals the negative impact on the profit warning decision of the governance mechanisms based on market values that aim at aligning the interest of the managers and directors with those of the shareholders.
京公网安备 11010802042870号
京ICP备2023020795号-1
分享
求助内容：
应助结果提醒方式：
扫码关注我们
