Non‐Executive Directors: A Question of Independence

Clifford, P; Evans, Robert

doi:10.1111/1467-8683.00064

Cited by 51 publications

(34 citation statements)

References 14 publications

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“…Consistent with prior research (e.g., Ball, Kothari & Robin, 2000;Ruddock, Taylor & Taylor, 2006), financial (133), insurance (10), utilities (30), IPO (106) and trust (92) firms are excluded. Consistent also with Clifford and Evans (1997), foreign incorporated and domiciled firms (64) are excluded, because their financial statements are not necessarily prepared in accordance with Australian disclosure requirements. To avoid the undue influences of unexpected share price changes, 222 firms not continuously listed on the ASX throughout the entire observation period (i.e., firms de-listed and subsequently re-listed) were eliminated.…”

Section: Sample Selectionmentioning

confidence: 99%

Audit Committee Characteristics and Audit Report Lag

2014

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This study seeks to determine whether audit committee compositional features are associated with the timeliness of financial reporting by Australian firms. Timeliness of financial reporting by firms, of which the length of an audit is a fundamental component, adds information content and impacts firm value, making an examination of audit report lag determinants important. Results indicate that audit committee members with financial expertise, prior audit committee experience and those who are independent are associated with shorter audit report lag. Results suggest that legislation mandating audit committee financial expertise and independence are effective also in improving the timeliness of financial reporting. More importantly, our results suggest that there may be benefits in constituting audit committees with other compositional features such as prior committee experience in overall efforts to improve the timeliness, and therefore quality, of financial reporting by firms.

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Section: Sample Selectionmentioning

confidence: 99%

Audit Committee Characteristics and Audit Report Lag

2014

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“…An independent non-executive director is defined as independent directors who have no affiliation with the firm except for their directorship (Clifford and Evans, 1997). There is an apparent presumption that boards with significant outside directors will make different and perhaps better decisions than boards dominated by insiders.…”

Section: Introductionmentioning

confidence: 99%

Board Structure and Corporate Performance in Malaysia

Abidin¹,

Kamal²,

Jusoff³

2009

IJEF

165

105

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This study examines the association between board structure and corporate performance, where performance is defined as the value added (VA) efficiency of the firm's physical and intellectual resources rather than the more commonly used financial terms or profitability ratios. It is argued that the inclusion of intellectual elements into the measurement provides a long-term measurement of corporate performance. The VA efficiency of the firm's total resources is calculated using the Value Added Intellectual Coefficient (VAIC) methodology developed by an Austrian, Ante Pulic. The four board characteristics that are of interest in this study are board composition, directors' ownership, CEO duality and board size. Based on a randomly selected sample of 75 companies listed on Bursa Malaysia, it is found that board composition and board size have a positive impact on firm performance, while the effects of directors' ownership and CEO duality on the VA efficiency of firm's total resources are not established. The outcome of the study shows that the emphasis on the importance of outside directors on the board by The Malaysian Code on Corporate Governance and by the requirements of Bursa Malaysia is deemed pertinent to the long-term corporate performance.

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“…Some directors may be non-executives but "affiliated or grey" in terms of either share ownership or family ties with the executive leadership which hinders their ability to exercise the level of monitoring and control required of an independent external director. Clifford and Evans (1997) argued that the presence of an affiliate non-executive director induces executive entrenchment. This thus explains the observed positive correlation between the proxy of board independence and corporate risk taking.…”

Section: Discussion Of Key Findingsmentioning

confidence: 99%

Board Rudiments and the Executive Attitude Towards Corporate Risk-Taking

Lawal¹

2018

IJFR

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This paper examines the effect of key board distinctiveness on managerial risk-taking behaviour. Using a total sample of 121 firms made up of 1,166 corporate directors and 847 firm-year observations, the study finds robust evidence across the three stages of estimation that suggests power separation in terms of CEO non-duality is negatively associated with executive risk-taking due to enhanced board assertiveness and independence. Board size is inversely associated with the variability of market value measure both within and at inter-firm levels. With average board membership in the study sample made up of 10 directors, the study finds crucial empirical evidence that points to the key benefits of large board configuration including the social capital, diversity of thoughts, knowledge, and experience, effectiveness and vigilance which curtails executive entrenchment. In contrast, the paper records positive association between the presence of foreign directors and corporate risk-taking. Due to their wealth of experiences, foreign directors tend to have more strategic sense of purpose and are likely not to hesitate in taking appropriate risk decisions when it really matters. While the paper finds little evidence that suggests a within-firm positive relationship between board independence and managerial risky propensities, there was no evidence found to indicate that board quality and ethnic diversity affects corporate risk-taking.

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Non‐Executive Directors: A Question of Independence

Cited by 51 publications

References 14 publications

Audit Committee Characteristics and Audit Report Lag

Audit Committee Characteristics and Audit Report Lag

Board Structure and Corporate Performance in Malaysia

Board Rudiments and the Executive Attitude Towards Corporate Risk-Taking

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