The Board Structure and Performance in IPO Firms: Evidence from Stakeholder-Oriented Corporate Governance

Naoki Watanabel, Shohei Yamauchi and Hideaki Sakawa
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Naoki Watanabel: Graduate School of Economics, Nagoya City University, Nagoya 4678501, Japan
Shohei Yamauchi: Graduate School of Economics, Nagoya City University, Nagoya 4678501, Japan

Sustainability, 2022, vol. 14, issue 13, 1-15

Abstract: This study investigates the internal mechanisms as an important factor for shareholders and stakeholders in initial public offering (IPO) firms with stakeholder-oriented corporate governance. Over the period of 2009–2016, we examine the role of independent directors in Japanese stakeholder-oriented corporate governance. According to previous research, the monitoring role of independent directors is strengthened in countries with a market-based financial system. Our empirical analyses show that independent directors do not effectively mitigate conflicts among shareholders such as IPO underpricing in a stakeholder-oriented corporate governance framework. Alternatively, accounting expertise may contribute to mitigating IPO underpricing in accordance with U.S. corporations. The participation of bank-affiliated directors in IPO firms further contributes to the mitigation of underpricing. Accordingly, these findings imply that bank ties through Horizontal Keiretsu’s bank-appointed directors are critical for mitigating conflicts among shareholders in IPO firms. These results imply that stakeholder-oriented corporate governance systems contribute to reducing conflicts among stakeholders.

Keywords: expertise; Horizontal Keiretsu; internal control; independent directors; IPO underpricing; sustainable developments (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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