Manuscript Type: EmpiricalResearch Question/Issue: Using the data of the 20 largest financial institutions from G8 countries, we explore whether the performance is higher for financial institutions with more independent directors on different committees during the 2007-08 financial crisis. We also examine the moderating effect of a country-level civil law dummy and firm-level excessive risk-taking behaviors on the independence-performance relationships. Research Findings/Insights: The empirical evidence shows that the performance during the crisis period is higher for financial institutions with more independent directors on auditing and risk committees. The influence of committee independence on the performance is particularly stronger for civil law countries. In addition, the independenceperformance relationships are more significant in financial institutions with excessive risk-taking behaviors. Theoretical/Academic Implications: Our findings complement existing works to partially resolve the independenceperformance relationship controversies by exploring the independence of different committees. The moderating effects of civil law countries and excessive risk-taking firms further address the governance environment's role in the effectiveness of director independence. Practitioner/Policy Implications: Our results provide important policy implications for financial institutions. The regulation authorities should enhance regulation compliance to improve director independence, particularly for auditing and risk committees in banking industry. Independent directors in the banking industry are supposed to put more emphasis on excessive risk-taking behaviors, as the financial institutions profit from risk-bearing earnings.

compensation information , comprehensive disclosure , agency conflict , board independence , self-selection bias ,

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Manuscript Type: Empirical Research Question/Issue: This study investigates two questions: (1) What is the relationship between organizational complexity and auditor choice, and (2) Does auditor choice influence the relationship between organizational complexity and firm value? Research Findings/Insights: Examination of a sample of large public US companies reveals a positive association between auditor quality and various proxies for organizational complexity. We also find a positive association between organizational complexity and firm value when the complex firm hires Big N auditors. The results are robust to alternative measures of auditor quality and firm value and to controls for the regulatory environment. Theoretical/Academic Implications: The results extend the agency theory argument that agency costs resulting from information asymmetry between managers and investors affect the demand for external monitoring by auditors, specifically the demand by organizationally complex firms for higher quality audits. We also shed light on how the value enhancement of a complex organization depends on auditor quality. Practitioner/Policy Implications: Our findings offer new perspectives for managers of complex firms that are industrially or geographically diversified. They can use the retention of a larger auditor as a credible signal that their consolidated reports are more informative about their financial performance. Further, the findings provide new insight into the value that investors place on auditor quality when they assess the value of firms with complex organizational structures.

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