Corporate governance and securities class actions

Chapple, Larelle June, Clout, Victoria J., & Tan, David (2014) Corporate governance and securities class actions. Australian Journal of Management, 39(4).

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This study investigates the governance attributes of firms that have been subject to securities class actions (SCAs). There has been a recent sizable increase in the number of firms subject to SCAs in Australia. We examine a sample of firms that have been subject to SCAs due to disclosure breaches and match the firms by industry and size to a control sample. First, we examine the compliance culture of the SCA firms via the frequency of Australian Securities Exchange (ASX)queries of the firm and find that the frequency of ASX queries is positively associated with the occurrence of a SCA. Secondly, we provide evidence that SCA firms exhibit weaker levels of corporate governance than the matched control sample. In addition, we contribute to the understanding of firms subject to SCAs and their corporate governance attributes. Our results suggest the presence of a nomination committee may be associated with higher agency costs and that the influence of CEO duality may reduce the effectiveness of a nomination committee.

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2 citations in Scopus
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2 citations in Web of Science®

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ID Code: 73090
Item Type: Journal Article
Refereed: Yes
Keywords: Class actions, Disclosure, governance, litigation, securities exchanges
DOI: 10.1177/0312896213512320
ISSN: 1327-2020
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BANKING FINANCE AND INVESTMENT (150200)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2014 SAGE Publications Ltd
Deposited On: 26 Jun 2014 22:43
Last Modified: 17 Dec 2014 05:53

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