Use this URL to cite or link to this record in EThOS: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.492325
Title: An analysis of independent director appointments and firm performance in Taiwan
Author: Chou, Hsin-I.
Awarding Body: Queen's University of Belfast
Current Institution: Queen's University Belfast
Date of Award: 2008
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Abstract:
Globally, corporate governance reformers have been convinced by the perceived benefits of independent outside director representation on boards. Their appointment has been predicated on the basis that they are a cost-effective monitoring device and can also contribute strategically to enhance corporate performance. A raft of countries have advocated, or made mandatory, minimum levels of independent director representation on corporate boards (Dahya and McConnell, 2005, 2007; Choi et aI, 2007). An element of Taiwan's Securities and Future Commission's governance reforms was to recommend the appointment of independent directors and supervisors. Consistent with other East-Asian economies, Taiwan's governance framework is characterised by familycontrolled boards and allows for the decoupling of control and cash-flow-rights which creates controlling minority ownership structure. In this environment controlling shareholders have an incentives,. and given weak investor protection, the opportunity to 'tunnel' at the expense of minority investors (Johnson et aI., 2000a; .Bae et ai. 2002; Classens et ai. 2006). This paper investigates the factors which influence firms' propensity to appointment independent directors and supervisors and whether they had a tangible effect on corporate performance. The results from the empirical analysis show. that cash-flow rights of the controlling shareholders are significantly positively correlated with the decision to appoint. Affiliation of board members to controlling shareholders significantly reduced compliance. This suggests that poor quality board were significantly less likely to enhance board independence. The results from the performance analysis indicate that compliant firms' performed significantly better than a matched peer group especially when they faced a sharp decline in performance over the previous year. This finding is important in the context of the extant literature. It is one of the few contemporary studies identifying a link between board independence and longer-term performance. Supplied by The British Library - 'The world's knowledge'
Supervisor: Not available Sponsor: Not available
Qualification Name: Queen's University of Belfast, 2008 Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.492325  DOI: Not available
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