eCite Digital Repository

The association between independent directors and company value. Confronting evidence from two emerging markets


Aluchna, M and Mahadeo, JD and Kaminski, B, The association between independent directors and company value. Confronting evidence from two emerging markets, Corporate Governance, 20, (6) pp. 987-999. ISSN 1472-0701 (2020) [Refereed Article]

Copyright Statement

Emerald Publishing Ltd

DOI: doi:10.1108/CG-08-2019-0263


Purpose: The purpose of the paper is to advance the understanding of the links between the presence of independent directors (IDs) on boards and the company value in the specific context of concentrated ownership. The authors apply the framework of agency theory to identify the monitoring effect of IDs in two legal systems common law and civil law.

Design/methodology/approach: The authors test formulated hypotheses using a unique sample of 50 Mauritian and Polish companies listed during the years 2007 to 2015, amounting to a total of 394 observations adopting the fixed effect panel model.

Findings: The results of the panel model show a negative relationship between independent directors on boards and company value. Specifically, the effect remains negative for companies operating in the civil law system, whereas the stronger protection offered by common law offsets the effect of concentrated ownership, resulting in a non-correlation between independent directors on board and firm value.

Originality/value: This study expands the understanding of the value added by independent directors, addressing their monitoring role in the unfavorable context of concentrated ownership. It also reveals that different legal frameworks of civil law and common law may impact the monitoring performed by independent directors.

Item Details

Item Type:Refereed Article
Keywords:ownership concentration, independent directors, common law, civil law
Research Division:Commerce, Management, Tourism and Services
Research Group:Strategy, management and organisational behaviour
Research Field:Corporate governance
Objective Division:Culture and Society
Objective Group:Ethics
Objective Field:Business ethics
UTAS Author:Mahadeo, JD (Dr Brinda Mahadeo)
ID Code:141312
Year Published:2020
Web of Science® Times Cited:11
Deposited By:Management
Deposited On:2020-10-14
Last Modified:2021-05-20

Repository Staff Only: item control page