Board Composition in New Zealand: An Agency Perspective
Andrew K. Prevost,
Ramesh Rao () and
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Andrew K. Prevost: Ohio University, Athens, USA,
Journal of Business Finance & Accounting, 2002, vol. 29, issue 5&6, 731-760
This paper looks at board composition determinants in New Zealand. We document that the proportion of outside board members is inversely related to insider equity ownership supporting the notion that these variables are substitute mechanisms in controlling agency problems. We also find that board composition is directly related to debt, ownership concentration, and profitability and inversely related to growth and firm size. There is evidence that firms with influential CEOs have lower outside board representation. Finally, we document that the passage of the legislation reforming company and securities laws in 1993 was associated with increased outside members on the board. Copyright Blackwell Publishers Ltd 2002.
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