Abstract
The purpose of this study is to investigate the impact of independent directors on the performance of Italian listed firms on the Milan Stock Exchange during the period 2006-2015. After applying a Fixed Effect Model, the empirical findings suggest that the composition of the board may affect corporate performances and, more specifically, a significant relationship emerges between the presence of independent directors within the Board and company results. Specifically, independent directors and independent female directors positively affect firm performance. Diversely, independent busy directors, those with hold more than three directorship in other boards, do not affect performance.
Highlights
The purpose of many studies on corporate governance is to seek a relationship between board characteristics and company performance
This paper analyzed the role and figure of independent directors within the corporate governance of Italian listed firms, taking into account the legislative process that led to the current definition of the corporate governance model, showing its peculiarities and analyzing the changes brought about by recent regulatory changes
The objective of the analysis was to verify the existence of a relationship between the presences of independent directors on the BoDs, considering the positions held in the company, and the corporate performance of the Italian listed companies observed over the period 2006-2015
Summary
The purpose of many studies on corporate governance is to seek a relationship between board characteristics and company performance. An important theme is represented by the investigation of the personal characteristics that members of the board should have to improve the control of the management's work and to provide a valid support to the decision-making process of the company (Hermalin & Weisbach, 2001; Stiles & Taylor 2001; Zattoni, 2006). The main shareholders often heavily manage the board of directors of listed Italian companies. The board of directors should be capable to prevent opportunistic behavior both of the controlling shareholder and of the managers: in this way, agency costs deriving from opportunistic managerial interventions can be limited. Other studies have criticized the useful of this figure, considering it impossible to import this type of administrator into our system because of it having been developed in an American and British context, one very different from Italian markets
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
