Research On The Impact Of CEO Career Concerns On Corporate Information Disclosure

Information disclosure of listed enterprises is an important measure to protect the right to be informed of market investors,alleviating the information asymmetry between enterprises and investors,so as to improve the information transfer efficiency of capital market,which is meaningful for the long-term development of capital market.The research on information disclosure of enterprise has always been one of the most popular topics in academia,however,there are still less systematic research on information disclosure of listed enterprises,besides,most of the existing results aim to discuss the influencing factors or economic consequences of a certain kind of information disclosure behavior,which cannot form a complete theoretical analysis framework.Moreover,the existing research results on the influencing factors of enterprise information disclosure mainly focus on the internal and external governance characteristics of enterprises as well as the impact of disclosure environment,while,there are not enough discusses on the managers’ personal characteristics,especially the potential impact of recessive psychological characteristics on enterprise information disclosure and its mechanism.From the perspective of managers’ career concerns,this paper integrates three aspects about the information disclosure of listed enterprises into a complete research framework,which include the financial information disclosure,non-financial information disclosure and economic consequences of information disclosure.According to the above three aspects,with the data of China’s A-share listed enterprises from 2001 to 2020 as the research sample,this paper analyzes the impact of the implicit psychological feature such as CEO career concerns on the quality of enterprise accounting information disclosure,the social responsibility disclosure and the market response of information disclosure,based on the basic research logic of "Career concerns-CEO performance pursuit motivation-Enterprise information disclosure policy-Enterprise information disclosure performance".In addition,this paper further reveals the specific process of CEO career concern affecting enterprise information disclosure through the channel analysis,Mediating effect analysis and heterogeneity analysis.In terms of the above research,this paper discusses the impact of CEO career concern on enterprise information disclosure in China’s listed enterprises,drawing the following conclusions:First of all,CEO career concerns have had a significant negative impact on the quality of accounting information disclosure of enterprises.As the CEO’s career concerns improving,the scale of discretionary accruals and the earning aggressiveness have been improved accordingly,while,the accrued quality has been reduced,which indicates that CEOs driven by career concerns tend to improve the financial performance of enterprises through more earnings management and windowing dressing of financial statements.Based on the further analysis,it shows that positive earnings management is the channel for CEO career concerns to affect the earnings quality of enterprises,which means that CEOs with higher career concerns tend to increase the discretionary accruals of enterprise,so as to promote the financial performance,thus,the earnings quality of enterprises can be reduced.Besides,the results of heterogeneity analysis indicate that the career concerns of CEOs in the state-owned enterprises and CEOs in the family enterprises as family membership have a weaker negative impact on the quality of accounting information disclosure.It shows that financial performance pressure plays a regulatory role in the negative correlation between CEO career concern and the quality of enterprise accounting information disclosure.Secondly,CEO career concerns significantly weakens the social responsibility disclosure of enterprises.Young CEOs with high levels of career concerns have lower social responsibility disclosure intensity,and enterprises with such CEOs also have lower probability of issuing annual social responsibility reports.Intermediary effect analysis indicates that CEO’s overconfidence cannot explain the negative correlation between young CEOs and social responsibility disclosure.The negative impact of CEO career concern on the social responsibility disclosure of enterprise is still significant with the interference of CEO’s overconfidence on the research results excluded.According to the heterogeneity analysis,it shows that if the enterprise performance is highly volatile before the CEO taking charge,during the early stage of the CEO taking charge and the CEO is taking charge in a non-state-owned enterprise,the negative impact of CEO career concern on enterprise social responsibility disclosure will be much stronger.It indicates that high performance pressure enhances the sensitivity of relationship between CEO career concern and the enterprise social responsibility disclosure.Thirdly,CEO career concerns significantly weakens the market response to enterprise information disclosure.CEO career concerns has no significant impact on the cumulative abnormal returns level of the annual report disclosure,while it reduces the cumulative abnormal returns scale of the annual report disclosure at the same time,which means that when the level of CEO’s career concern rises,the market response of the enterprise’s information disclosure is weaker.With the further analysis,it comes out that the internal and external governance characteristics of enterprises as well as the information disclosure environment affect the negative correlation between career concern and the market response scale of enterprise information disclosure.Therefore,the weakening impact of CEO career concern on the market response to information disclosure disappears in the enterprises with higher internal control quality,higher shareholding ratio of external investors and lower product market competition.Based on the above conclusions,this paper puts forward corresponding countermeasures and suggestions from the two aspects of enterprise governance and capital market.Firstly,it is suggested that the consideration of CEO career concerns should be incorporated into the CEO selection and recruitment policies and CEO performance assessment mechanism.On the one hand,it should estimate the career concern levels of CEO candidates and the potential impact on enterprise information disclosure,arranging the relevant plans to avoid and reduce the adverse impact of CEO career concerns.On the other hand,it should carry out the design and implementation of a diversified performance appraisal mechanism,including the performance,such as the long-term performance and social performance,so as to fundamentally weaken the impact of CEO self-interest purpose on the decisions like enterprise information disclosure.Secondly,it is suggested to improve the internal governance of enterprises from the two aspects of management system and board supervision.On the one hand,the mechanism between management and the quality of internal control should be improved to weaken the intervention and influence of CEO on CFO and other management systems,so as to make the enterprise decision-making more professional.On the other hand,the supervision mechanism of the board and the construction of external stakeholder groups such as social responsibility committee should also be promoted to improve the comprehensiveness and effectiveness of the board supervision mechanism.Thirdly,it is suggested to establish the China’s professional manager market system to provide a professional platform for two-way selection and information communication between enterprises and CEOs.According to this platform,China’s professional manager career access mechanism can be explored and established to make CEOs pay attention to the maintenance of personal reputation from the perspective of career development,so as to make their work more standard.Fourthly,it should improve the existing enterprise information disclosure system,providing legal and institutional guarantees for the weaknesses of enterprise information disclosure such as non-financial information.Moreover,the institutional investors can be cultivated and supported to encourage product market competition,strengthening the effectiveness of enterprise information disclosure by improving the enterprise information disclosure environment,so as to make the capital market more effective.This paper covers the impact and mechanism of CEO career concern on enterprise financial information disclosure,non-financial information disclosure and the economic consequences of information disclosure,which systematically and comprehensively discusses the comprehensive impact of CEO career concern on enterprise information disclosure with the existing theoretical research on managers’ career concerns and enterprise information disclosure.Furthermore,this paper provides useful references for the institutional innovation of the listed enterprises’ governance and supervision mechanism during China’s economic transition,for the improvement of CEO selection and assessment scheme,as well as for the further promotion of the information disclosure system in China’s listed enterprises.