Does the independence of independent directors matter?

Crespí–Cladera, Rafel; Pascual-Fuster, Bartolomé

doi:10.1016/j.jcorpfin.2013.12.009

Cited by 73 publications

(42 citation statements)

References 68 publications

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“…In China, members of the board of directors of listed companies are divided into independent and nonindependent directors. Being an independent director of a listed firm means that he/she does not hold any other position in the listed firm except that of director and has no relationships with the firm, major shareholders, and managers that may hinder his/her independent and objective judgment (Crespí‐Cladera & Pascual‐Fuster, ). The independence of independent directors enables them to make objective assessments while executing decision making and oversight functions (Shukeri, Shin, & Shaari, ), especially when it comes to considering the interests of stakeholders.…”

Section: Literature Review and Hypothesismentioning

confidence: 99%

Do female directors influence firms' environmental innovation? The moderating role of ownership type

Liao

Zhang

Wang

2018

Corp Soc Responsibility Env

100

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As more and more females join boards of directors, their decisions concerning environmental innovation have also become the focus of scholars. Based on the upper echelons theory, feminist caring theory, and social role theory, this study constructed a relationship model between female directors and firms' environmental innovations and chose ownership type as the moderating variable. Selecting 688 listed companies in the Chinese manufacturing industry as the research sample and adopting multiple regression analysis methods, the study found that, when the proportion of female directors on the board of directors increased, the level of a firm's environmental innovation also increased significantly. After female directors were divided into independent and nonindependent directors, we found that female independent directors had a significant effect on the firms' environmental innovations. However, female chairpersons had no significant effect on the firms' environmental innovations. In addition, the effect of female directors and female independent directors on a firm's environmental innovation was stronger for state-owned listed companies.

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Section: Literature Review and Hypothesismentioning

confidence: 99%

Do female directors influence firms' environmental innovation? The moderating role of ownership type

Liao

Zhang

Wang

2018

Corp Soc Responsibility Env

100

View full text Add to dashboard Cite

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“…Researchers have focused on quality factors of financial reporting, such as earning management [26][27][28], financial restatements [29][30][31], and fraud [32][33][34][35]. These authors have used these quality factors, which restrict the production of high-quality corporate financial reports, as evidence in the collapse of financial reporting.…”

Section: Earnings Management and Corporate Governancementioning

confidence: 99%

Financially Qualified Members in an Upper Echelon and Their Relationship with Corporate Sustainability: Evidence from an Emerging Economy

2018

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Non-observable board diversity is an important organizational strategy for improving the long-term growth and survivability of firms. The involvement of corporate sustainability (CS) in top management teams has led to effective boards. By using agency theory, we stress how financially qualified directors (FQD) in audit committees (ACs) may positively or negatively affect the practice of earnings management (EM). We also use various theories to explain how a powerful chief executive officer (CEO) complicates the effectiveness of AC and reduces their ability to detect EM practices. Using a sample of 1020 firm-year observations representing 204 non-financial listed Pakistani firms during 2013-2017, we find that the presence of FQD on the AC is associated with lower levels of EM. Our analysis shows that this effect is driven by the level of FQDs' accounting knowledge.

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“…Several corporate governance characteristics are also taken into account. Board independence ( IDP_RATIO ) is defined as the proportion of the number of independent directors to the number of directors on the board (Crespi‐Cladera & Pascual‐Fuster, ; Hwang & Kim, ). BOARD _ SIZE is the number of directors on the board.…”

Section: Empirical Modelsmentioning

confidence: 99%

Friendly compensation committees and pay‐for‐luck asymmetry: Evidence from Taiwan

Pan

Liao

Hsu³

2020

Corporate Governance

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Research Question/Issue The study examines whether the presence of social ties between compensation committee members and executives explains pay‐for‐luck asymmetry in compensation, which means that the compensation contracts reward executives with higher pay for good luck but minimally penalize them with lower pay for bad luck. Research Findings/Insights We find that half of our sample firms have a friendly compensation committee, defined as the majority of the committee members having at least two social ties with executives. For firms with a friendly compensation committee, executives tend to be rewarded for good luck but not be penalized for bad luck, which indicates the presence of pay‐for‐luck asymmetry. For firms without a friendly compensation committee, their executive compensation is not associated with good luck or bad luck. Theoretical/Academic Implications The higher homophily due to social ties between compensation committee members and executives induces the committee to be more mentally close to or loosen the monitoring intensity over executives, and to be less likely to make an unfavorable design of compensation toward executives in the presence of bad luck. We complement existing studies by clearly demonstrating the channel through which executives influence the committee members. We also highlight the decisive role of the compensation committee in examining pay‐for‐luck asymmetry research issues. Practitioner/Policy Implications Our findings inform practitioners that social ties between compensation committee members and executives may impair the monitoring intensity of the committee, and hence, regulators should take measures to mandate or at least encourage firms to provide social ties information. https://www.youtube.com/watch?v=UL9iGjERnRo&feature=youtu.be

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Does the independence of independent directors matter?

Cited by 73 publications

References 68 publications

Do female directors influence firms' environmental innovation? The moderating role of ownership type

Do female directors influence firms' environmental innovation? The moderating role of ownership type

Financially Qualified Members in an Upper Echelon and Their Relationship with Corporate Sustainability: Evidence from an Emerging Economy

Friendly compensation committees and pay‐for‐luck asymmetry: Evidence from Taiwan

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