Diversity on management and supervisory board and accuracy of management earnings forecasts in IPO prospectuses
<p align="center">Motivation: Although the issue of accuracy and bias of earnings forecasts revealed in the IPO prospectuses has attracted attention of many researchers, the literature on the relationship between board characteristics and the quality of such financial projections is...
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| Format: | Article |
| Language: | English |
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Uniwersytet Mikołaja Kopernika
2019-09-01
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| Series: | Ekonomia i Prawo |
| Subjects: | |
| Online Access: | https://apcz.umk.pl/czasopisma/index.php/EiP/article/view/21140 |
| _version_ | 1828832552293498880 |
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| author | Tomasz Sosnowski Anna Wawryszuk-Misztal |
| author_facet | Tomasz Sosnowski Anna Wawryszuk-Misztal |
| author_sort | Tomasz Sosnowski |
| collection | DOAJ |
| description | <p align="center">Motivation: Although the issue of accuracy and bias of earnings forecasts revealed in the IPO prospectuses has attracted attention of many researchers, the literature on the relationship between board characteristics and the quality of such financial projections is still very limited, especially for a two-tier board structure consisting of the management and the supervisory board. The policy of diversity on the boardroom is promoted in many countries and composition of the management and supervisory boards is expected to be comprehensive and diverse, among others, in terms of gender, education, age and professional experience of the members.</p><p align="center">Aim: The main objective of this study is to analyse the relationship between the accuracy of the earnings forecast disclosed in the IPO prospectus and the diversity of company’s corporate governance institutions. More specifically, we ask a question whether the extent of diversity in the board system features may have an impact on the accuracy of such forward-looking financial information.</p>Results: Using a sample of 104 IPOs from the Warsaw Stock Exchange, we find that certain characteristics of the management and supervisory board enhance the usefulness of forward-looking financial information from a IPO prospectus, as some of boards characteristics are important for the evaluation of the earnings forecasts credibility at the time of IPO. For example, in accordance with our expectations, the age diversity results in more accurate forecasts. This evidence may be seen as an argument |
| first_indexed | 2024-12-12T16:56:23Z |
| format | Article |
| id | doaj.art-8459f311b7ee4d86a3e09021e785666f |
| institution | Directory Open Access Journal |
| issn | 1898-2255 |
| language | English |
| last_indexed | 2024-12-12T16:56:23Z |
| publishDate | 2019-09-01 |
| publisher | Uniwersytet Mikołaja Kopernika |
| record_format | Article |
| series | Ekonomia i Prawo |
| spelling | doaj.art-8459f311b7ee4d86a3e09021e785666f2022-12-22T00:18:13ZengUniwersytet Mikołaja KopernikaEkonomia i Prawo1898-22552019-09-0118334736310.12775/EiP.2019.02417323Diversity on management and supervisory board and accuracy of management earnings forecasts in IPO prospectusesTomasz Sosnowski0Anna Wawryszuk-Misztal1University of LodzMaria Curie-Sklodowska University in Lublin<p align="center">Motivation: Although the issue of accuracy and bias of earnings forecasts revealed in the IPO prospectuses has attracted attention of many researchers, the literature on the relationship between board characteristics and the quality of such financial projections is still very limited, especially for a two-tier board structure consisting of the management and the supervisory board. The policy of diversity on the boardroom is promoted in many countries and composition of the management and supervisory boards is expected to be comprehensive and diverse, among others, in terms of gender, education, age and professional experience of the members.</p><p align="center">Aim: The main objective of this study is to analyse the relationship between the accuracy of the earnings forecast disclosed in the IPO prospectus and the diversity of company’s corporate governance institutions. More specifically, we ask a question whether the extent of diversity in the board system features may have an impact on the accuracy of such forward-looking financial information.</p>Results: Using a sample of 104 IPOs from the Warsaw Stock Exchange, we find that certain characteristics of the management and supervisory board enhance the usefulness of forward-looking financial information from a IPO prospectus, as some of boards characteristics are important for the evaluation of the earnings forecasts credibility at the time of IPO. For example, in accordance with our expectations, the age diversity results in more accurate forecasts. This evidence may be seen as an argumenthttps://apcz.umk.pl/czasopisma/index.php/EiP/article/view/21140corporate governanceipo forecast accuracymanagement and supervisory board diversityforecast error |
| spellingShingle | Tomasz Sosnowski Anna Wawryszuk-Misztal Diversity on management and supervisory board and accuracy of management earnings forecasts in IPO prospectuses Ekonomia i Prawo corporate governance ipo forecast accuracy management and supervisory board diversity forecast error |
| title | Diversity on management and supervisory board and accuracy of management earnings forecasts in IPO prospectuses |
| title_full | Diversity on management and supervisory board and accuracy of management earnings forecasts in IPO prospectuses |
| title_fullStr | Diversity on management and supervisory board and accuracy of management earnings forecasts in IPO prospectuses |
| title_full_unstemmed | Diversity on management and supervisory board and accuracy of management earnings forecasts in IPO prospectuses |
| title_short | Diversity on management and supervisory board and accuracy of management earnings forecasts in IPO prospectuses |
| title_sort | diversity on management and supervisory board and accuracy of management earnings forecasts in ipo prospectuses |
| topic | corporate governance ipo forecast accuracy management and supervisory board diversity forecast error |
| url | https://apcz.umk.pl/czasopisma/index.php/EiP/article/view/21140 |
| work_keys_str_mv | AT tomaszsosnowski diversityonmanagementandsupervisoryboardandaccuracyofmanagementearningsforecastsinipoprospectuses AT annawawryszukmisztal diversityonmanagementandsupervisoryboardandaccuracyofmanagementearningsforecastsinipoprospectuses |