Does Independent Directors' Participation Matter in Interactive Information Exchange? Evidence from Earnings Communication Conferences in China*

Abstract The study examines how independent directors’ (IDs’) participation in earnings communication conferences (ECCs) influences the quality of investor‐management interactions. Using question‐and‐answer transcripts from Chinese ECCs, we construct a multidimensional measure of interaction quality that incorporates semantic relevance (via Sentence‐BERT embeddings), response readability, and information content. We find that IDs' participation significantly enhances interaction quality. Mechanism analyses suggest that this effect operates through diligence signaling, real‐time oversight, and reputational incentives. The enhancement is more pronounced when IDs are female, younger, have longer tenure, or hold fewer concurrent directorships. Moreover, the marginal benefit is greater when multiple IDs attend the ECC. Finally, we show that IDs' participation amplifies the positive capital market reaction to high‐quality interactions. These findings highlight the critical role of IDs in promoting effective interactive information exchange.