THE EFFECT OF INDEPENDENT DIRECTORS, CEO TENURE AND CO-OPTED DIRECTORS ON 8-K FILING: EMPIRICAL STUDY

Naser Khaledi
Kuwait University

ABSTRACT

This study examines the effect of independent directors, tenured CEOs, and
coopted directors (board members appointed by the current CEO) on the frequency of
8-K filing. Utilizing financial data for the fiscal years 2015–2018, and the stepwise
regression. The results of this study revealed that the tenured CEOs and co-opted
directors are significantly and negatively associated with 8-K filing.
This indicates that tenured CEOs and co-opted directors are not releasing material information
in a timely manner, and the co-opted directors are more
aligned with the CEO who had appointed them. On the other hand, the independent
directors have a significant and positive relationship with 8-K filing. This indicates that
the directors’ presence in the firm results in increased 8-K filing, informing market
participants on material events. This study contributes to existing
literature by providing consistent evidence about the effectiveness of independent
directors’ presence on the board of directors in disseminating material information
pertaining to the firm through 8-K filing.

Keywords: 8-K Filing, co-opted director, independent director, CEO tenure