Independent directors' dissent on boards: Evidence from listed companies in China

Ma, Juan; Khanna, Tarun

doi:10.1002/smj.2421

Cited by 137 publications

(111 citation statements)

References 32 publications

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“…While our study is from a particular institutional context, our findings complement other meta‐analytic reviews by specifically shedding light on the temporal role of institutional reforms. The idiosyncrasies of the Chinese institutional context can create challenges in applying our findings to broader contexts, yet they also reveal how some of the unique elements such as social priorities accompany the formation of arm's‐length codes such as boards’ requirement to reveal director dissent (Ma and Khanna, ). Therefore, as illustrated in Table , our study complements the findings of the previous meta‐analyses by leveraging the increasing empirical attention to corporate governance research in China.…”

Section: Discussionmentioning

confidence: 99%

Corporate Governance in China: A Meta‐Analysis

Mutlu

Essen

Peng³

et al. 2018

J Management Studies

102

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How has the impact of ‘good corporate governance’ principles on firm performance changed over time in China? Amassing a database of 84 studies, 684 effect sizes, and 547,622 firm observations, we explore this important question by conducting a meta‐analysis on the corporate governance literature on China. The weight of evidence demonstrates that two major ‘good corporate governance’ principles advocating board independence and managerial incentives are indeed associated with better firm performance. However, we cannot find strong support for the criticisms against CEO duality. In addition, we go beyond a static perspective (such as certain governance mechanisms are effective or ineffective) by investigating the temporal hypotheses. We reveal that over time, with the improvement in the quality of market institutions and development of financial markets, the monitoring mechanisms of the board and state ownership become more strongly related to firm performance, whereas the incentive mechanisms lose their significance. Overall, our findings advance a dynamic institution‐based view by substantiating the case that institutional transitions matter for the relationship between governance mechanisms and firm performance in the second largest economy in the world.

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Section: Discussionmentioning

confidence: 99%

Corporate Governance in China: A Meta‐Analysis

Mutlu

Essen

Peng³

et al. 2018

J Management Studies

102

View full text Add to dashboard Cite

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“…If the independent directors are appointed by the congress or the MOF, then one has to question (a) how independent they are and ( corporations in China should be independent directors, but research has shown that the independent directors tend to vote with the controlling shareholder and/or CEO. Those independent directors who do dissent, tend to end their careers as directors or executives soon afterward, while the majority of independent directors try to preserve a reputation for being supportive of management proposals (Ma and Khanna, 2013).…”

Section: Public Benefits Of Controlmentioning

confidence: 99%

State-Owned Enterprise Reform in Latin America: Issues and Possible Solutions

Musacchio

Pineda

García

2015

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work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/ licenses/by-nc-nd/3.0/igo/legalcode) and may be reproduced with attribution to the IDB and for any noncommercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. AbstractThis paper examines the challenges governments in Latin America face to control their state-owned enterprises (SOEs). It argues that, absent privatization, governments can rely on a variety of reforms to address some of the main problems affecting SOEs. These problems are divided into corporate governance problems-which include agency and multiple-principals problems-and the fiscal governance problem, which has to do with the discretionary nature of the fiscal relationship between the government and its enterprises. Then the paper discusses a variety of solutions for each of these problems. Rather than providing a single recipe, it argues that governments can design governance mechanisms that rely on the market (e.g., by partially privatizing a firm and listing it on a stock exchange), on ex-ante administrative controls, or on hybrid solutions that combine both. Thus, the paper argues that the mechanisms to deal with the problems of SOEs have to be designed on a case-by-case basis, taking into account the specific problems of the public enterprise in question and the economic (and political) environment affecting it.JEL Codes: H11, H50, H77, G30

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“…() provide evidence on how directors transmit knowledge about management practices and corporate governance to firms in China by showing that firm performance increases after firms hire directors with foreign experience. Ma and Khanna () find that reputational concerns motivate directors to openly disagree with management on corporate proposals. Jiang et al .…”

Section: Institutional Background and Research Hypothesismentioning

confidence: 99%

Board interlocks and capital structure dynamics: evidence from China

Jiang

Mai

2019

Accounting & Finance

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Using a sample of Chinese A-share listed companies from the Shanghai and Shenzhen stock exchanges from 2007 to 2016, this paper investigates the effects of director network centrality on the speed of capital structure adjustment. The results indicate that firms in the central position of the director network have a higher speed of capital structure adjustment and a lower extent of deviation from the target capital structure. This effect is mainly significant for non-stateowned enterprises (non-SOEs). Collectively, the evidence shows the network of interlocked directors creating mechanisms for information and resource exchanges, which enhance the efficiency of corporate financing polices.

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Independent directors' dissent on boards: Evidence from listed companies in China

Cited by 137 publications

References 32 publications

Corporate Governance in China: A Meta‐Analysis

Corporate Governance in China: A Meta‐Analysis

State-Owned Enterprise Reform in Latin America: Issues and Possible Solutions

Board interlocks and capital structure dynamics: evidence from China

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