The SEC Disclosure Requirement and Directors’ Turnover Around Stock Repurchase

  •  Foued Hamouda    
  •  Jamel Henchiri    


The aim of this research is to outline board turnover when firms repurchase their own shares. Indeed, to control insiders’ short-swing trading during repurchase events and protect outsiders against speculation, it is useful to know how boards are changed. We examine the introduction of the SEC 2004 disclosure requirement effectiveness on repurchase announcement returns and director’s turnover in a sample of 764 companies over 1998 to 2013. In a broad cross-section of US firms, we argue that the SEC 2004 Rule appears to receive greater weight in turnover decision. However, the more insiders are entrenched into the board, the more they cannot be replaced easily even though 2004 disclosure Rule is adopted. We also find that a large number of board independencecontinue to explain the variation of board turnover.

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