Pay to Incentivize or Pay to Capture: Evidence from Independent Director Behaviour in China

2016 ◽  
Vol 2016 (1) ◽  
pp. 15466
Author(s):  
Jyun-Ying Fu
Keyword(s):  
Independent Director

Litigation Risk and the Independent Director Labor Market

2019 ◽  
Author(s):  
Dain C. Donelson ◽  
Elizabeth Tori ◽  
Christopher G. Yust
Keyword(s):  
Labor Market ◽  
Independent Director ◽  
Litigation Risk

scholarly journals Limiting role of resource dependence: an examination of director interlocks, board meetings and family ownership

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vidya Sukumara Panicker ◽  
Rajesh Srinivas Upadhyayula
Keyword(s):  
Board Of Directors ◽  
Resource Dependence ◽  
Family Firms ◽  
Emerging Market ◽  
Resource Provisioning ◽  
Independent Directors ◽  
Family Ownership ◽  
Independent Director ◽  
Content Type

PurposeThis paper attempts to examine the activity and involvement of board of directors in internationalization activities of firms in emerging markets, by evaluating the resource provisioning roles of interlocks provided by board of directors, and the frequency of board meetings. We demonstrate that the effectiveness of board involvement is contingent upon the levels of family ownership in firms since family ownership could impact the firm’s ability to utilize the presence of different types of board members.Design/methodology/approachThe authors test our hypotheses on a sample of listed Indian companies, extracted from the Prowess database published by the Centre for Monitoring Indian Economy (CMIE), a database of the financial performance of Indian companies. On a panel of 3,133 firm years of 605 unique Indian firms with foreign investments, over a time period of 2006–2017, the authors apply different estimation techniques.FindingsThe results demonstrate that both board meeting frequency and director interlocks are instrumental in supporting internationalization activities in emerging market firms. However, family ownership moderates the role of insider and independent interlocks on internationalization investments in different ways; the authors find that interlocks provided by independent directors support internationalization activities in family firms, whereas those provided by insider directors do not. Further, the study also finds that board meetings are less effective in internationalization of family firms.Practical implicationsThe authors conclude that family firms aiming at international diversification require to develop more connected and networked independent directors to enable internationalization in firms. While independent director interlocks enhance the international investments, it is also useful to know that board meetings are ineffective in utilizing the resources in family firms. This points to the possibility that family firms should device mechanisms to integrate family meetings with board meetings so that they can utilize the within-family processes to aid in their internationalization decisions.Originality/valueThe study contributes to resource dependence theory by understanding its limiting role in family firms. Theoretically, it helps delineate the limiting resource provision role of the insider directors vis-à-vis independent directors. The authors argue that the resource provision role of insider director interlocks does not effectively help in internationalization in comparison to independent director interlocks in family-dominated firms. Consequently, the study shows the limiting role of resource provision and utilization by family-owned firms in comparison to non-family-owned firms.

Do Independent Director Departures Predict Future Bad Events?

2015 ◽  
Author(s):  
RRdiger Fahlenbrach ◽  
Angie Low ◽  
Renn M. Stulz
Keyword(s):  
Independent Director

Compromise on the Board: Investigating the Antecedents and Consequences of Lead Independent Director Appointment

2017 ◽  
Vol 60 (6) ◽  
pp. 2239-2265 ◽  
Author(s):  
Ryan Krause ◽  
Michael C. Withers ◽  
Matthew Semadeni
Keyword(s):  
Independent Director ◽  
Antecedents And Consequences ◽  
Director Appointment

The Role of Board Leadership Structure in Firm Governance

2021 ◽  
Author(s):  
Danuse Bement ◽  
Ryan Krause
Keyword(s):  
Firm Performance ◽  
Independent Director ◽  
Negative Consequences ◽  
Ceo Duality ◽  
Board Chair ◽  
Board Committees ◽  
Board Leadership ◽  
Leadership Structure ◽  
Board Leadership Structure

Boards of directors are governing bodies that reside at the apex of the modern corporation. Boards monitor the behavior of firm management, provide managers access to knowledge, expertise, and external networks, and serve as advisors and sounding boards for the CEO. Board attributes such as board size and independence, director demographics, and firm ownership have all been studied as antecedents of effective board functioning and, ultimately, firm performance. Steady progress has been made toward understanding how boards influence firm outcomes, but several key questions about board leadership structure remain unresolved. Research on board leadership structure encompasses the study of board chairs, lead independent directors, and board committees. Board chair research indicates that when held by competent individuals, this key leadership position has the potential to contribute to efficient board functioning and firm performance. Researchers have found conflicting evidence regarding CEO duality, the practice of the CEO also serving as the board chair. The effect of this phenomenon—once ubiquitous among U.S. boards—ranges widely based on circumstances such as board independence, CEO power, and/or environmental conditions. Progressively, however, potential negative consequences of CEO duality proposed by agency theory appear to be counterbalanced by other governance mechanisms and regulatory changes. A popular mechanism for a compromise between the benefits of CEO duality and independent monitoring is to establish the role of a lead independent director. Although research on this role is in its early stage, results suggest that when implemented properly, the lead independent director can aid board monitoring without adding confusion to a unified chain of command. Board oversight committees, another key board leadership mechanism, improve directors’ access to information, enhance decision-making quality by allowing directors to focus on specialized topics outside of board meetings, and increase the speed of response to critical matters. Future research on the governance roles of boards, leadership configurations, and board committees is likely to explore theories beyond agency and resource dependence, as well as rely less on collecting archival data and more on finding creative ways to access rarely examined board interactions, such as board and committee meetings and executive sessions.

scholarly journals Independent Director, Executives Compensation and Corporate Performance-Correcting Self-Selection Bias by Matching Methods

2016 ◽  
Vol 8 (8) ◽  
pp. 156
Author(s):  
Yuan Chang ◽  
Pang-Tien Lieu
Keyword(s):  
Executive Compensation ◽  
Selection Bias ◽  
Corporate Performance ◽  
Stock Exchange ◽  
Sample Selection ◽  
Board Independence ◽  
Independent Director ◽  
Economic Consequence ◽  
Self Selection ◽  
Two Step Estimation

Based on data of listed companies on Taiwan Stock Exchange (TWSE) through 2001~2011, this paper examines whether board independence has effects on executive compensation and corporate performance. Existing studies lacked of considering self-selection of board independence in evaluating the effects of board independence on economic consequence. This may incur estimation bias because systematic factors determining firm’s introducing independent director also have influences on economic consequence. While Heckman (1979)’s two-step estimation addressed selection duo to unobservables, this paper employs propensity score matching (PSM) from Rosenbaum and Rubin (1983, 1985a,b) to address sample selection duo to observables, and forms two groups of samples, namely, firms with independent director and firms without independent director but share similar characteristics with the former. Empirical evidence from regression estimation shows divergent outcomes under before-matching versus after-matching samples. Before matching, greater degree of board independence is associated with higher profitability and higher level of total and average executive compensation. After matching, outperformance as well as overpay on executive compensation of firm with greater board independence is vanished. After controlling selection bias duo to observables versus unobservables, our evidence concludes that greater board independence is uncorrelated with greater corporate performance and executive compensation overpay.

scholarly journals Independent Director System: An Assistant Mechanism of Corporate Governance

2009 ◽  
Vol 4 (12) ◽  
Author(s):  
Yurong Chen ◽  
Weixing Wang
Keyword(s):  
Corporate Governance ◽  
Independent Director

The Independent Director and the Investor: New Directions

1996 ◽  
pp. 79-91
Author(s):  
Neville Bain ◽  
David Band
Keyword(s):  
Independent Director ◽  
New Directions
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