Do investors value the separation of disclosure duties from managerial roles? Evidence from China’s Board Secretary Regulation

摘要

We examine whether investors value the separation of disclosure duties from managerial roles within top management. We use China’s Board Secretary Regulation, which restricts listed firms’ board secretaries from concurrently holding certain senior managerial positions. Using an event-study design around the consultation draft and final-rule announcements, we find that firms whose board secretaries held restricted concurrent appointments experienced significantly higher cumulative abnormal returns than firms without such appointments. The results are robust to alternative expected-return models, event windows and propensity-score matching. The return differential increases with prior reporting-related inquiry letters and the number of restricted concurrent positions, consistent with investors anticipating benefits from greater disclosure independence and fewer competing demands on attention. For CFO–board secretary duality, the reaction is positive and significant under weak governance but insignificant under strong governance, suggesting that investors weigh the information benefits of this combination against its governance costs. Stronger reactions also occur among firms with male board secretaries, lower analyst coverage and lower regional marketization. Overall, the findings suggest that investors expected mandated role separation to improve disclosure governance, particularly where disclosure-governance concerns are greater and external monitoring is weaker.