Fiduciary or loyalty? Evidence from top management counsel and stock liquidity

Michael Michael, Muhammad Jahangir Ali, Nader Atawnah, Balachandran Muniandy

Research output: Contribution to journalArticlepeer-review

9 Citations (Scopus)


We examine whether and how corporate top management counsel (TMC) influences stock liquidity and document a significant positive association. Our results remained robust to a series of sensitivity tests and continue to hold after accounting for potential endogeneity concerns. We identify a reduction in information asymmetry and business risk as the channel through which TMC affects stock liquidity. Further tests reveal that the positive relationship is stronger when the CEO has no legal expertise and in the post-SOX period, where firms are mandated to have in-house counsel. Our paper contributes to the ongoing debate on the dual paradox of TMC's role (gatekeeper v. facilitator) and has policy implications.

Original languageEnglish
Article number100709
JournalGlobal Finance Journal
Publication statusPublished - May 2022
Externally publishedYes


  • Information asymmetry
  • Risk management
  • Sarbanes–Oxley act of 2002 (SOX)
  • Stock liquidity
  • Top management counsel

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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