We evaluate the opinions of directors and other stakeholders and show that independent directors (IDs) are facing an expectations gap about their role. The results of an experiment also indicate that business journalists and investors provided lower evaluative judgements of decisions made by IDs than did directors and that evaluative judgements of financial decisions made by IDs were affected by outcome information (hindsight bias). It is important that regulators and the media, as a key information intermediary, remain cognisant of the effects of hindsight bias on their judgements about ID performance, especially after events such as corporate collapses.<p></p>
Publication Date
2021-06-01Journal
Accounting & FinanceVolume
61Issue
2Pagination
32p. (p. 2965-2996)Publisher
WileyISSN
0810-5391Rights Statement
© 2020 Accounting and Finance Association of Australia and New Zealand. This is the peer reviewed version of the following article: Bryce M; Ali M & Mather P (2021). Director expectations gap and hindsight bias. Accounting and Finance, 61(2), 2965-2996, which has been published in final form at http://doi.org/10.1111/acfi.12689. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
