How does corporate control affect the appointment, auditing expertise and reputation of independent directors? Evidence from Taiwan

Yung-Chuan Lee () and Ming-Chang Wang

The Quarterly Review of Economics and Finance, 2017, vol. 64, issue C, 130-140

Abstract: This study examines the influence of corporate control on the appointment and quality characteristics of independent directors. Our findings, based upon a dataset of related appointments within listed companies in Taiwan, suggest that the preferences of firms to voluntarily appoint independent directors has a positive association with the control right of the controlling shareholder, stemming from the cash flow rights, not from the deviation between ownership and control after decomposing the control. Most importantly, we find that the firms with high control right and cash flow rights of the controlling shareholders are likely to voluntarily appoint independent directors with good auditing expertise and reputation.

Keywords: Appointment of independent directors; Auditing expertise of independent directors; Reputation of independent directors; Controlling shareholders (search for similar items in EconPapers)
JEL-codes: G32 G34 L20 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:64:y:2017:i:c:p:130-140

DOI: 10.1016/j.qref.2016.06.010

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