The unfriendly board: Antecedents and consequences of board dissent

This study examines the antecedents and consequences of board dissent. Drawing from agency theory and the information-processing perspective, we propose that the level of earnings management is negatively associated with the likelihood of board dissent, and that this relationship is moderated by environmental complexity. We also contend that board dissent may improve firm performance, but it may prompt managers to use more deviant strategies. Using a sample of public firms in China, we find support for our hypotheses. Our findings contribute to the literatures on board effectiveness and corporate governance.