Military-experienced directors, CEO busyness and financial statement footnotes readability: evidence from Indonesia
Purpose: This study examines the relationship between the characteristics of militarily experienced directors and financial statement footnote readability. The second research question considers whether CEO busyness impacts the relationship between military-experienced directors and financial statem...
| Main Authors: | , , , |
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| Format: | Journal Article |
| Published: |
2024
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| Online Access: | http://hdl.handle.net/20.500.11937/95401 |
| _version_ | 1848766004885192704 |
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| author | Abdul Wahab, Effiezal Harymawan, I. Wardani, D.A.K. Nasih, M. |
| author_facet | Abdul Wahab, Effiezal Harymawan, I. Wardani, D.A.K. Nasih, M. |
| author_sort | Abdul Wahab, Effiezal |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | Purpose: This study examines the relationship between the characteristics of militarily experienced directors and financial statement footnote readability. The second research question considers whether CEO busyness impacts the relationship between military-experienced directors and financial statement footnotes readability. Design/methodology/approach: We use nonfinancial listed firms on the Indonesian Stock Exchange from 2010 to 2018, which amounted to 1,002 firm-year observations. We test the hypotheses and use fixed effects and Heckman's two-stage regression. Findings: This study documents a negative relationship between military directors and financial statement footnote readability. We extend this relationship by factoring board busyness into the equation. We find that the presence of military-connected and busy CEOs negatively impacts the readability of financial statement footnotes. The results remain robust after additional analyses. Research limitations/implications: Future research should consider a more robust measure of military-experienced directors. A broader context of directors' busyness should be considered, such as including multiple directorships. Originality/value: We revisit the literature on military-experienced directors by considering political connections as one of the proxies for military connections in Indonesia. The findings largely support the convergence of the political connections literature in which rent-seeking activities are prevalent and prevent sound financial reporting. |
| first_indexed | 2025-11-14T11:44:15Z |
| format | Journal Article |
| id | curtin-20.500.11937-95401 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:44:15Z |
| publishDate | 2024 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-954012024-08-23T02:25:22Z Military-experienced directors, CEO busyness and financial statement footnotes readability: evidence from Indonesia Abdul Wahab, Effiezal Harymawan, I. Wardani, D.A.K. Nasih, M. Purpose: This study examines the relationship between the characteristics of militarily experienced directors and financial statement footnote readability. The second research question considers whether CEO busyness impacts the relationship between military-experienced directors and financial statement footnotes readability. Design/methodology/approach: We use nonfinancial listed firms on the Indonesian Stock Exchange from 2010 to 2018, which amounted to 1,002 firm-year observations. We test the hypotheses and use fixed effects and Heckman's two-stage regression. Findings: This study documents a negative relationship between military directors and financial statement footnote readability. We extend this relationship by factoring board busyness into the equation. We find that the presence of military-connected and busy CEOs negatively impacts the readability of financial statement footnotes. The results remain robust after additional analyses. Research limitations/implications: Future research should consider a more robust measure of military-experienced directors. A broader context of directors' busyness should be considered, such as including multiple directorships. Originality/value: We revisit the literature on military-experienced directors by considering political connections as one of the proxies for military connections in Indonesia. The findings largely support the convergence of the political connections literature in which rent-seeking activities are prevalent and prevent sound financial reporting. 2024 Journal Article http://hdl.handle.net/20.500.11937/95401 10.1108/ARA-09-2023-0246 fulltext |
| spellingShingle | Abdul Wahab, Effiezal Harymawan, I. Wardani, D.A.K. Nasih, M. Military-experienced directors, CEO busyness and financial statement footnotes readability: evidence from Indonesia |
| title | Military-experienced directors, CEO busyness and financial statement footnotes readability: evidence from Indonesia |
| title_full | Military-experienced directors, CEO busyness and financial statement footnotes readability: evidence from Indonesia |
| title_fullStr | Military-experienced directors, CEO busyness and financial statement footnotes readability: evidence from Indonesia |
| title_full_unstemmed | Military-experienced directors, CEO busyness and financial statement footnotes readability: evidence from Indonesia |
| title_short | Military-experienced directors, CEO busyness and financial statement footnotes readability: evidence from Indonesia |
| title_sort | military-experienced directors, ceo busyness and financial statement footnotes readability: evidence from indonesia |
| url | http://hdl.handle.net/20.500.11937/95401 |