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Antecdents and Performance Outcome of Board Independence: Australian Evidence

Citation

Wang, Yi and Brooks, A and Oliver, J, Antecdents and Performance Outcome of Board Independence: Australian Evidence, Proceedings of the AFAANZ Conference 2008, 6-8 July 2008, Sydney, Australia EJ (2008) [Refereed Conference Paper]


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Abstract

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.

Item Details

Item Type:Refereed Conference Paper
Research Division:Commerce, Management, Tourism and Services
Research Group:Business and Management
Research Field:Corporate Governance and Stakeholder Engagement
Objective Division:Economic Framework
Objective Group:Microeconomics
Objective Field:Preference, Behaviour and Welfare
Author:Wang, Yi (Mr Yi Wang)
ID Code:55760
Year Published:2008
Deposited By:Accounting and Corporate Governance
Deposited On:2009-03-13
Last Modified:2012-02-24
Downloads:0

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