The effect of directors' and officers' liability insurance and indemnification on voluntary disclosure : evidence from Canadian firms
Bibliographic record
Abstract
This paper examines whether legal liability coverage, as measured by the level of Directors' and Officers' (D&O) liability insurance coverage and cash for indemnification, is associated with the quantity and quality of the firm's voluntary disclosures. Using Canadian firms whose D&O insurance data are publicly available, I find that the higher the coverage, the more frequent the voluntary disclosures, especially for firms that are cross-listed in the U.S. I also find that more liability coverage also leads to disclosures of more precise, but less timely, bad news for firms that are cross-listed in the U.S., consistent with the litigation cost argument for the disclosure of bad news. Further, cash for indemnification is a more significant determinant of disclosure decisions than D&O insurance for my sample firms. Finally, I provide new empirical evidence that the timing decision of actual earnings announcements is a function of a firm's legal liability coverage and the presence of voluntary disclosures in the form of management earnings forecasts.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.021 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.003 | 0.008 |
| Science and technology studies | 0.003 | 0.001 |
| Scholarly communication | 0.002 | 0.001 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.001 | 0.001 |
| Insufficient payload (model declined to judge) | 0.003 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".