Abstract
The composition of directors on boards of directors has always been a major topic in studies related to corporate governance to examine its impact on firm performance as well as share performance. Independent directors have become a crucial element in academic debates regarding their presence on boards. Issues related to independent directors have prompted governments and policymakers to update or enforce existing regulations to ensure compliance among firms in increasing their numbers on boards for making the best decisions and overseeing management to safeguard the interests of shareholders. Many academic studies have been conducted in specific areas to assess the effects of independent directors on firm performance, operations, value, and share performance, including in business, economics, finance, accounting, and social sciences. However, the results of previous empirical studies have not yet been consistent enough to serve as a reference for stakeholders such as boards of directors, firms, shareholders, investors, and governments. Meanwhile, such studies are still lacking in ASEAN countries. Therefore, this study aims to critically review existing literature on the impact of the relationship between independent directors and share performance in three ASEAN countries (Malaysia, Thailand, and Indonesia). Furthermore, to identify existing gaps, this study identified several key aspects from a theoretical, contextual, operational, methodological, and measurement perspective in previous empirical research. Based on the results of research in the existing literature, they have not yet been generalized to a broader context, sector, and population. Therefore, to enhance deeper understanding, this study will propose various research avenues related to independent directors and share performance. Hence, based on this study, it can be concluded that the results of existing research are still inconclusive and mixed. Finally, the implications of this study on policy, theory, and practice are discussed.
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