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Antecdents and Performance Outcome of Board Independence: Australian Evidence

conference contribution
posted on 2023-05-23, 04:24 authored by Wang, Yi, Brooks, A, Oliver, J
Current recommendations in Australia and some other economies identify independent directors as a key component of effective corporate governance. The research on the empirical link between board characteristics and firm performance, matching the trend towards greater board independence, is growing; the mixed evidence, however, suggests the need for an in-depth investigation. In this study several theories, which make different predictions about the effect of board independence on firm performance and vice versa, are tested. The results indicate that, for Australian listed companies, there is no strong relationship between board independence, and past or subsequent firm performance; it is reported that the level of board independence does not have any significant effect on firm . risk. The evidence casts doubts on the hope that promoting board independence would improve corporate performance. It is recommended that, despite agency theory's policy influence, whether certain corporate governance practices proposed-by the perspective would lead to better performance should be empirically tested.

History

Publication title

Proceedings of the AFAANZ Conference 2008

Editors

Chairman of Technicial Committee

Pagination

EJ

Department/School

TSBE

Publisher

AFAANZ

Place of publication

Sydney, Australia

Event title

AFAANZ 2008

Event Venue

Sydney, Australia

Date of Event (Start Date)

2008-07-06

Date of Event (End Date)

2008-07-08

Repository Status

  • Restricted

Socio-economic Objectives

Preference, behaviour and welfare

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    University Of Tasmania

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