Dual‐board governance and board independence: Conglomerate affiliate versus standalone firms
Md Hamid Uddin,
Khakan Najaf,
M. Kabir Hassan
et al.
Abstract:We argue that the corporate board of an exchange‐listed firm cannot make an independent business decision if it has an affiliation with a conglomerate group. This is because the corporate board of a conglomerate‐affiliated firm (CAF) has high moral hazard exposure due to its accountability to the superior parent board at the apex of the conglomerate structure. Based on a sample of 304 listed firms from 18 countries, we find a CAF board is less independent than a standalone board with no superior reporting body… Show more
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