Do Independent Directors Matter? Evidence from Regulatory Change in an Emerging Market

Hsu-Huei Huang

Emerging Markets Finance and Trade, 2022, vol. 58, issue 4, 1137-1146

Abstract: This research examines the operating performance of firms listed on the Taiwan stock exchange following the initial appointment of independent directors due to regulatory change. Although the firms appointing independent directors do not outperform the matched firms for all the sample firms, the results show that the appointment of independent directors does have a positive influence on the operating performance of firms in greater need of objective monitoring. Firms with lower growth opportunities, with a CEO concurrently serving as board chairman, with higher insider shareholdings, or with lower foreign institutional shareholdings tend to perform significantly better than their matched firms over the three-year period following the initial appointment of independent directors.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:58:y:2022:i:4:p:1137-1146

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DOI: 10.1080/1540496X.2021.1954502

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