Co-opted boards and earnings management: Evidence of reduced short-termist behavior

This study contributes to the emerging literature on board co-option by examining how and what extent co-opted directors influence managers’ attitudes about earnings management. We find robust evidence that mitigates both real activities accrual-based Our findings support view higher reduces managerial short-termism because it enhances job security as are known be less likely remove managers from office. results different measures of management, they continue hold after accounting for endogeneity selection concerns. Finally, we provide additional showing a degree lowers likelihood chief executive officer (CEO) being forcefully removed office managing in previous year. JEL CLASSIFICATION G30; G34; G39