Consentient Votes With Reservation: Independent Directors’ Signaling Efforts

Using China’s unique corporate governance structure, which mandates independent directors to publish opinion reports for approving specific transactions, we investigate how the tone of these reports affects market reactions to consentient votes. Our findings reveal that investors respond negatively to a conservative tone, highlighting the information-dissemination role of independent directors. The negative market reaction is stronger when: (1) independent directors face a lower cost of acquiring information, (2) they have a greater incentive and ability to communicate relevant information to minority shareholders, and (3) the opinion report is longer, readable, and more forward-looking. Moreover, a conservative tone is associated with poor future performance at both the firm and transaction levels, suggesting that the informational role of independent directors may outweigh their monitoring role in the context of opinion reports. Our study enhances the existing literature by demonstrating that, in a weak institutional environment, independent directors can serve as a protective mechanism for investors by providing value-relevant information through their conservative-toned opinions on management proposals.

• Publication year

  2026

• Venue

  Journal of Accounting, Auditing & Finance

• Publication date

  2026-01-07

• Fields of study

  Not labeled

• Identifiers
  DOI 10.1177/0148558x251413311
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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