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Withdrawal of Earnings Guidance: The Influence of Connected Firms and Directors

Although withdrawal of earnings guidance (providing information to stock market investors and others regarding a firm’s expected results) has been studied in general, the influence of board connections and director characteristics on the spread of earnings guidance withdrawals hasn’t.

Telfer professor Ali Akyol has now received a School of Management Research Grant to study withdrawal of this guidance at the beginning of the COVID-19 pandemic. He’ll use the pandemic to examine mimicking behaviour in the corporate environment and understand how a societal shock can spread between companies through board connections.

Akyol will try to understand how information flows between networks and which factors help — or hinder — that flow. He will assess which types of board connections (e.g., from larger to smaller firms and vice versa) influence guidance withdrawals and whether only specific types of connections do so.

The research will also focus on the characteristics of influential board members and whether specific characteristics (e.g., directors with long vs. short tenure) are more strongly associated with guidance withdrawals within firms.

Research impact

This research could contribute important information to the literature about information flow, particularly among firms with board connections, and the factors affecting it. This could help to better predict information flow, which in turn could help investors predict firms’ actions and inform their own decisions.


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Professor Akyol's research mainly focuses on the effect of governance related regulations, the board of directors, firm disclosure and financial misconduct on shareholder value. His recent work examines the composition of the boards of directors and uses new and novel data that enhances our understanding of how board members interact with each other. Learn more about Ali Akyol’s research.