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SARBANES-OXLEY, CORPORATE GOVERNANCE, AND STRATEGIC DIVIDEND DECISIONSDownload This Article
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This paper empirically analyzes the impact of the Sarbanes-Oxley Act on the relation between measures of corporate governance and a firm’s dividend policy in the U.S. equity market. Using the IRRC database, we find that there is a statistically significant relation between governance measures and a firm’s dividend policy in the years prior to the introduction of the Sarbanes-Oxley Act. However, following Sarbanes-Oxley, the relation between a firm’s governance structure and dividend policy changes. In particular, shareholders’ rights and the proportion of outside directors are no longer significant in explaining a firm’s dividend policy.
Keywords: Sarbanes-Oxley, Agency Theory, Governance, Dividends
Authors’ individual contribution: Conceptualization – M.B., J.J., and K.Y.; Methodology – M.B. and J.J.; Investigation – M.B. and K.Y.; Data Curation – M.B. and K.Y.; Writing – M.B., J.J., and K.Y.
JEL Classification: G30, G32, G38
Published online: 11.11.2019
How to cite this paper: Bertus, M., Jahera, J. S., & Yost, K. (2019). Sarbanes-Oxley, corporate governance, and strategic dividend decisions. Corporate Ownership & Control, 17(1), 116-124. http://doi.org/10.22495/cocv17i1art11