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Independent Directors (independent + director)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

The Role of the Independent Director: Evidence from a Survey of Independent Directors in Australia

AUSTRALIAN ACCOUNTING REVIEW, Issue 3 2009
Albie Brooks
The purpose of this paper is to report the results of a survey of independent directors on a range of issues relating to the execution of their role including the independent directors' perceptions relating to board effectiveness, board interactions, information sources, and performance and evaluation. A survey was forwarded to independent directors of the top 200 Australian Securities Exchange (ASX) listed companies. The paper aims to provide the perceptions of independent directors themselves and so contribute to the literature through a better understanding of the nature of the work performed by Australian company independent directors and the environment in which it occurs. Findings suggest that the fundamental role of the independent director has not changed as a result of the corporate governance reforms. [source]

Voluntary Appointment of Independent Directors in Taiwan: Motives and Consequences

JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 9-10 2008
Chaur-Shiuh Young
Abstract:, This study explores factors that motivate firms to increase board independence in the absence of legal requirements to do so. In addition, we examine the impact of voluntary enhancement of board independence on firm performance. Using a sample of listed companies in Taiwan, we show that voluntary appointment of independent directors is associated with both economic factors and managerial power. Specifically, we find that board independence increases with the weaknesses of alternative corporate governance mechanisms and the severity of agency problems. However, board independence decreases with managerial ownership and family control. In addition, by employing a simultaneous equations model with selectivity, we provide evidence supporting the positive performance impact of voluntary appointment of independent directors in Taiwan. [source]

The Role of the Independent Director: Evidence from a Survey of Independent Directors in Australia

Business Group Affiliation, Firm Governance, and Firm Performance: Evidence from China and India

CORPORATE GOVERNANCE, Issue 4 2009
Deeksha A. Singh
ABSTRACT Manuscript Type: Empirical Research Question/Issue: This study seeks to understand how business group affiliation, within firm governance and external governance environment affect firm performance in emerging economies. We examine two aspects of within firm governance , ownership concentration and board independence. Research Findings/Insights: Using archival data on the top 500 Indian and Chinese firms from multiple data sources for 2007, we found that group affiliated firms performed worse than unaffiliated firms, and the negative relationship was stronger in the case of Indian firms than for Chinese firms. We also found that ownership concentration had a positive effect on firm performance, while board independence had a negative effect on firm performance. Further, we found that group affiliation , firm performance relationship in a given country context was moderated by ownership concentration. Theoretical/Academic Implications: This study utilizes an integration of agency theory with an institutional perspective, providing a more comprehensive framework to analyze the CG problems, particularly in the emerging economy firms. Empirically, our findings support, as well as contradict, some of the conventional wisdom, and suggest useful avenues for future research. Practitioner/Policy Implications: This study shows that reforms in general and CG reforms in particular are effective in emerging economies, which is an encouraging sign for policy makers. However, our research also suggests that it may be time for India and China to stop the encouragement for the empire building through group formation in the corporate world. For practioners, our findings suggest that firms need to balance the need for oversight with the need for advice, while selecting independent directors. [source]

Two Factors Affecting Internal Audit Independence and Objectivity: Evidence from Singapore

INTERNATIONAL JOURNAL OF AUDITING, Issue 2 2001
Jenny Goodwin
This study examines two factors that may influence the independence and objectivity of internal audit. The first, affecting the organizational independence of the internal audit function, is its relationship with the audit committee. The second is the use of the function as a management training ground. It is argued that this practice might affect individual objectivity because internal auditors may be reluctant to withstand pressure from an auditee who could be their future supervisor. A survey of chief internal auditors in Singapore was undertaken to establish current practice in these areas and to identify relationships between these variables. A strong relationship between the audit committee and the internal audit function was found, with the level of interaction being greater when the audit committee was comprised solely of independent directors. The use of the internal audit function as a management training ground was also found to be quite widespread in Singapore. [source]

Auditor Opinion Shopping and the Audit Committee: An Analysis of Suspicious Auditor Switches

INTERNATIONAL JOURNAL OF AUDITING, Issue 1 2001
Deborah Archambeault
This study examines whether audit committee effectiveness characteristics are related to suspicious auditor switching. Using the agency and audit committee literature, we hypothesize that audit committee existence, the proportion of independent directors, member experience in accounting, auditing, and finance, number of committee meetings, and number of committee members should be inversely related to suspicious auditor switching. A sample of 60 matched U.S. firms was evaluated along the hypothesized dimensions after controlling for company size, industry, stock exchange, financial health, and management stock ownership. Collectively, univariate and logistic regression results provide support for our predictions. The findings indicate that suspicious switchers: (1) are less likely to have an audit committee, (2) have a smaller percentage of independent directors on the audit committee, (3) have fewer members with experience in accounting, auditing, or finance, (4) hold fewer audit committee meetings, and (5) have smaller audit committees than nonsuspicious switching companies. Exploratory analyses also reveal that audit committees for companies with suspicious switches had younger members, and fewer members with no stock ownership in the company served. [source]

Voluntary Appointment of Independent Directors in Taiwan: Motives and Consequences

Insider Trading, Earnings Management and Corporate Governance: Empirical Evidence Based on Hong Kong Firms

JOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 3 2007
Bikki Jaggi
We document positive association between earnings management and insider selling after the fiscal year-end for Hong Kong firms. This positive association is especially evident before the 1997 Asian Financial Crisis. Our findings suggest that Hong Kong executives manage reported earnings to maximize their private benefits from insider selling. Additionally, we find that a higher proportion of independent directors (INED) on corporate boards moderate the positive association between insider selling and earnings management. Stricter monitoring of earnings management by INED is especially evident when no member of the family with majority ownership is present on corporate boards as a director. This suggests that the presence of family members with majority ownership on corporate boards significantly reduces INED's monitoring effectiveness. Our findings suggest that strict regulations are needed to control insider trading, and independence of corporate boards is important for monitoring of earnings management associated with insider trading. Furthermore, appointment of family members with majority shareholdings should be avoided to enhance independence and to monitor effectiveness of corporate boards. [source]

Principal,Principal Conflict in the Governance of the Chinese Public Corporation

MANAGEMENT AND ORGANIZATION REVIEW, Issue 1 2008
Yiyi Su
abstract By examining the level of ownership concentration across firms, we determine how principal,principal conflict, defined as the incongruence of ownership goals among shareholder groups in a corporation, impacts agency costs of Chinese boards of directors. Based on data from Chinese companies listed on the Shanghai and Shenzhen stock exchanges during 1999,2003, we found that ownership concentration had a U-shaped relationship with board compensation, board size and the presence of independent directors. These results provide corroborating evidence that principal,principal conflict can lead to high agency costs. [source]