Does the Firm with Well-Educational Level of Board Members Have Good Corporate Governance?

Abstract

This study examined the degree to which the educational level of directors affects corporate governance and firm value in firms. From the results, it has been found that the educational levels of directors are negatively related to corporate governance performance. On the other hand, firms with higher-educated directors have lower block shareholders’ holdings, which implies that the ownership right is not concentrated and block shareholders cannot effectively monitor the operation of the firm to avoid agency problems. Furthermore, a firm with higher educational levels of directors and stronger governance mechanisms is more significant to raise the firm value.