Attendance of Board Meetings and Company Performance: Evidence from Taiwan

Chou, Hsin-I; Chung, Huimin; Yin, Xiangkang

doi:10.2139/ssrn.2188721

Cited by 10 publications

(15 citation statements)

References 57 publications

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“…Independent (or outside) directors have no material or pecuniary relationship with company or related persons (except sitting fees) and do not own company stock. While the primary role of the board of directors is to monitor corporate management, Chen et al (2013) and Chou et al (2013) argued that in Taiwan, independent directors provide more rigorous oversight than do non-independent (or inside) directors. It is commonly assumed that companies with a larger number of independent directors are associated with better corporate governance and/or firm performance (Chen et al, 2013).…”

Section: Hypothesis VImentioning

confidence: 99%

“…It is commonly assumed that companies with a larger number of independent directors are associated with better corporate governance and/or firm performance (Chen et al, 2013). Consequently, independent directors are more likely than dependent directors to mitigate agency problems through their monitoring role in Taiwan's publicly traded firms (Chou et al, 2013).…”

Section: Hypothesis VImentioning

confidence: 99%

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Understanding corporate philanthropy in the hospitality industry

Chen

Lin

2015

International Journal of Hospitality Management

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Section: Hypothesis VImentioning

confidence: 99%

Section: Hypothesis VImentioning

confidence: 99%

Understanding corporate philanthropy in the hospitality industry

Chen

Lin

2015

International Journal of Hospitality Management

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“…We do not make a directional prediction for these two variables. Vafeas () and Chou, Chung, and Yin () contend that the number of board meetings represents the monitoring efforts made by the board; therefore, we control the number of board meetings ( MEETS ). In addition, we control for the effect of directors' ownership ( DIR_HOLD ) on executive compensation.…”

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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“…To examine how D&O insurance coverage affects meeting participation of independent directors, we estimate the following model:

Meeting Attendance = α + β D & O + λ^{'} Firm Control + δ^{'} Board Control + ϵ,

where the dependent variable is either (1) Personal Attendance or (2) Proxy Attendance . We explicitly distinguish between personal attendance and proxy attendance not only because of data availability, but more importantly because prior studies (e.g., Chou, Chung, and Yin, ) find that personal board meeting attendance enhances firm performance, while proxy attendance has an adverse performance implication. To further evaluate the net impact of D&O insurance on meeting participation and to make our variable measurement comparable to prior studies, we followed Adams and Ferriera () to construct a third dependent variable (3) Attendance Problem that equals 1 if the firm has at least one independent director who personally attends fewer than 75 percent of the board meetings he/she is supposed to in a given year.…”

Section: Effect Of Dando Insurance Coverage On Independent Director Behmentioning

confidence: 99%

“…However, little is known about their incentives—what motivate or demotivate outside directors to spend time and effort on their governance task? Recent literature has begun to empirically examine this question and has identified monetary rewards (Adams and Ferriera, ), reputation concerns (Masulis and Mobbs, ), and director's own qualification (Chou, Chung, and Yin, ) as important determinants. Yet these only represent several components of a director's overall incentive.…”

Section: Introductionmentioning

confidence: 99%

Directors’ and Officers’ Liability Insurance, Independent Director Behavior, and Governance Effect

Jia

Tang

2016

J of Risk & Insurance

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We examine the effect of directors’ and officers’ liability insurance (D&O insurance) on the behavior of independent directors and the effectiveness of their governance role. Using a unique data set, we find a negative relation between D&O insurance and personal board meeting attendance by independent directors and a positive relation between D&O insurance and meeting attendance by authorized representatives. Content analysis of independent director opinion reports indicates that D&O insurance encourages independent directors to behave less responsibly. Insured independent directors are also more likely to be busy. Collectively, D&O insurance reduces the effectiveness of independent directors in corporate governance.

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Attendance of Board Meetings and Company Performance: Evidence from Taiwan

Cited by 10 publications

References 57 publications

Understanding corporate philanthropy in the hospitality industry

Understanding corporate philanthropy in the hospitality industry

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

Directors’ and Officers’ Liability Insurance, Independent Director Behavior, and Governance Effect

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