CFO Serving As The Secretary Of The Board, Quality Of Information Disclosure And Cost Of Equity Capital

Research on the cost of equity capital has always been the important part in corporate finance.The cost of equity capital is very important for managing the company and also has a great impact on the decision of investment and financing.Studies have shown that investor relationship management of listed companies is an important factor which influences the cost of equity capital.The secretary of the board,the senior executive of the listed company,is mainly responsible for information disclosure and investor relationship management,playing an important role in strengthening market supervision and improving corporate governance.In recent years,more and more CFO serve as the secretary of the board.Will CFO serving as the secretary of the board has an impact on the cost of equity capital? The problem is worth exploring.By reading relevant literature,the paper analyzes the impact of CFO serving as the secretary of the board on the cost of equity capital and the quality of information disclosure,basing on principal-agent theory and the high-level echelon theory.By building relevant models,this paper selects the listed companies in shenzhen stock exchange as the research samples,and studies the impact of CFO serving as the secretary of the board on the quality of information disclosure and cost of equity capital based on the relevant data of the sample companies from 2013 to 2017.This paper further analyzes the internal mechanism of the effect of CFO serving as the secretary of the board on the cost of equity capital,revealing the mediating effect of information disclosure quality on the relationship between CFO serving as the secretary of the board and the cost of equity capital.The empirical research results show that:(1)CFO serving as the secretary of the board has a negative correlation with the cost of equity capital.It means that CFO serving as the secretary of the board has a negative impact on the cost of equity capital.And the effect is more significant in non-state-owned enterprises and enterprises with high ownership concentration.(2)CFO serving as the secretary of the board is positively correlated with the quality of information disclosure.It means that CFO serving as the secretary of the board is conducive to improving the quality of information disclosure.(3)Information disclosure quality plays an intermediary role between CFO serving as the secretary of the board and the cost of equity capital,and plays a part in the intermediary role.This paper not only supplements the research on the factors affecting the cost of equity capital,but also enriches the relevant research on the secretary of the board.The research results not only provide new empirical support for the high-level echelon theory,but also provide suggestions for selecting company executives,making investment decisions and formulating relevant policies.