Independent Directors, CEO’s Power And Information Disclosure Quality

Information disclosure of listed companies is a key factor that affect investors’ behavior and corporations’ financ ing efficiency. Improving the quality of information disclosure is an important way to improve capital market management system. Independent director system and CEOs’ power would have a measurable impact on the quality of information disclosure. Using mathematical models and econometric models researches the way independent directors, CEOs’ power affects the quality of information disclosure of listed companies.Through game theory analysis on listed company, regulatory institutions and investors, it founds the probability of listed companies’ disclosure false information and government sector of supervision cost is directly proportional, but with the punishment and social is inversely proportional, while investors’ behavior does no obviously affect it. The probability of government sector supervising information disclosure is proportional to the investors’ venture capital, and inversely proportional to investors’ risk premium.Start with the corporation governance structure, the game theory analysis founds that the checks and balances between independent directors and C EOs can make the information disclosure reach the market optimal level, but which is less than the stock holders’ expectation.The statistical study on disclosure quality of listed companies shows that since 2008, there was a rising trend of average quality of information disclosure of listed companies, and the variance in the quality of information disclosure reduces. But inconsistent with the overall trends, the rates of information disclosure violation in irregularities of listed companies increased after 2008.In order to explain the intrinsic factors affecting information disclosure quality of listed companies, based on independent directors and CEOs’ power it makes an empirical study. Results show that, the financial and legal background of independent directors and the salaries of independent directors and C EOs will have a positive impact on the quality of information disclosure of listed companies, while part-time status, duty status of independent directors and the Board of Auditors has no significant impact on the quality of information disclosure.According to the conclusions of theoretical models and empirical analysis, it gives some advices of improving the quality of information disclosure of listed companies from both operation mechanism of capital market and corporation governance structure.