The Effect Of Board Independence On The Information Environment And Information Asymmetry

In recent years, the negative news about the accounting fraud ever came from the foreignsecurities market, companies involved in these scandals is not only well-known for some ofthe world-renowned companies such as World Communications, Xerox and Enron, etc. These,along with some of the Chinese listed companies, such as silver mansions and Lam bothcompanies. These continued emission of negative news for people on the effectiveness ofindependent directors of this company governance system have been questioned. But thefocus of the system is to question whether there is an independent company board of directorsor independent directors should not be questioned whether the system itself is correct, whichis the key to whether the company has an independent board of directors and independentdirectors. If the board is not independent, then the functions of the Board have certainly notbeen a normal play. Listed companies in China after twenty years of development, in theseyears of the establishment of a basic system of the Board of Directors, the Board of Directorswith the economic development system is constantly self-improvement, now, whether it iscorporate governance practitioners or academics have a question relating to the Board a keeninterest in that and what impact will this affect the independence of the board of directorshave much information on the environment.This article is based on this order of2213listed companies from2010to2012as asample, the company’s board of directors discussed the impact of asymmetric information onhow the independence of the company’s information environment and investors. In makingassumptions environmental information in this article is divided into three parts, namelyaccruals quality, voluntary disclosures and analyst tracking. This paper shows that greaterboard independence will lead to higher accruals quality, more and more extensive voluntarydisclosure analyst tracking. By comparison article affect the independence of the Board ofDirectors of the above three, and then explores the contribution of board independence whichone large, the stronger its supervision. We also verified greater board independence will resultin higher accruals quality, more voluntary disclosure and broader analyst tracking, and higheraccruals quality, more voluntary disclosure and broader analysis Normal tracking will reducethe information asymmetry investors, so the above three cross-term further argues that greaterboard independence will reduce the information asymmetry. In accrual quality, voluntarydisclosure and analysts tracking the number of these areas, the paper finds that analysts tracking is one of the most significant media, which confirms the independence associatedwith analysts tracking the company’s board of board independence affect investors’information asymmetry plays an important part. Overall, our paper helps to better understandthe impact of the environment on board independence investor information environment ofasymmetric information.