Removing Vacant Chairs: Does Independent Directors’ Attendance at Board Meetings Matter?

Huilong Liu (), Hong Wang () and Liansheng Wu ()
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Huilong Liu: University of International Business and Economics
Hong Wang: Peking University
Liansheng Wu: Peking University

Journal of Business Ethics, 2016, vol. 133, issue 2, No 12, 375-393

Abstract: Abstract In this paper we investigate whether independent directors’ attendance at board meetings enhances investor protection using a difference-in-difference approach. We find that independent directors’ attendance alleviates tunneling. This effect is more pronounced in non-state-owned enterprises (non-SOEs) than in state-owned enterprises. The reinforcement of external supervision substitutes for the role of independent directors’ attendance and this substitution effect is more significant in non-SOEs. Together, these results imply that independent directors’ attendance at board meetings can play an important role in protecting investors, especially in non-SOEs and when external supervision is weak. This paper sheds new light on independent directors’ function in corporate governance, and has implications for institutional improvements.

Keywords: China; Corporate governance; Independent directors; Investor protection (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (20)

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DOI: 10.1007/s10551-014-2402-6

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