Influence Of Independent Directors Research Articles

The Influence Of Good Corporate Governance On Firm Value With Financial Performance As A Moderation

The aim of this research is to determine the effect of good corporate governance on firm value in food and beverage companies on the Indonesia Stock Exchange with financial performance as a moderating variable. This research is quantitative research. The number of companies in the food and beverages subsector consists of 30 (thirty) companies. The sample in this research consisted of 13 companies over 5 years. Data collection is carried out through financial reports. This research data was analyzed using a moderation test. The findings of this research indicate that 1) There is an influence of financial performance on firm value. 2) There is an influence of Independent Commissioners on firm value. 3) There is an influence of Independent Directors on firm value. 4) There is an influence of Independent Audit on firm value. 5) There is a moderating influence of the Independent Commissioner's financial performance on firm value. 6) There is a moderating influence of independent directors' financial performance on firm value. 7) There is a moderating influence of financial performance on Independent Audit on firm value in Food and Beverage Companies on the Indonesian Stock Exchange.

The Effect of Good Corporate Governance on Financial Performance with Earning Management as a Mediation Variable in SOEs Listed on the Indonesia Stock Exchange

This study aims to empirically prove the effect of good corporate governance on company financial performance with earnings management as a mediating variable in state-owned companies listed on the Indonesia Stock Exchange (IDX) for the 2011-2020 period. The data used in this study were collected using documentation techniques, and the type of data used in this study was secondary data. Data processing uses panel data regression, and the tool used in the study is EViews version 12. The results show that independent directors and independent audit committees directly have a significant negative effect on financial performance, government ownership partially has a significant positive impact on financial performance, and independent commissioners have no significant negative effect on financial performance. In contrast, earnings management had no significant positive impact on financial performance in state-owned companies listed on the IDX from 2011 to 2020. The results also show that independent directors and independent audit committees have no significant positive effect on financial performance. In contrast, independent commissioners and government ownership have no significant negative impact on earnings management. The research did not find the mediating role of earnings management on the influence of independent directors, independent commissioners, government ownership, and independent audit committees on the company's financial performance. Keywords: Good Corporate Governance, Independent Director, Independent Commissioner, Government Ownership, Independent Audit Committee, Financial Performance, Earning Management

Independent directors in Sweden and their influence on earnings through accrual and real activities management

The dominating perspective grounded in agency theory predicts that independent boards are more effective in monitoring and thereby reducing earnings management, yet the extant empirical evidence is inconclusive. We nuance the relationship between board independence and earnings management by introducing two additional theories that explain independent directors’ role on the board: the theory of personal dependence and praxis theory. According to personal dependence theory, the influence of independent directors on earnings management is a function of their competitiveness in the labor market, whereas the praxis theory attributes directors’ influence to the influence of the dominant coalition. We focus on two dimensions of earnings management  accrual and real activities management, and account for both direction and magnitude of directors’ influence. Through an empirical test on 148 Swedish corporations from 2017, our findings indicate that the presence of independent directors may not necessarily reduce earnings management. Instead, independent directors may be subject to multiple and sometimes conflicting task demands which differently influence both magnitude and direction of earnings management. Implications for our understanding of the role of independent directors and their influence on corporations are presented

The Influence of Independent Directors, Insider Ownership and Scientific Connections on Risky R&D Investments: Evidence from Emerging Markets

Anastasia N. Stepanova - National Research University The Higher School of Economics, 
 E-mail: anstepanova@hse.ru
 Anna Alexandrovna Tereshchenko - National Research Institute "Higher School of Economics
 R&D projects in the pharmaceutical industry are extremely risky and bring benefits in the long-run period. Self-interested managers try to avoid risk and underinvest in R&D. In this paper we study the effect of independent directors, insider ownership and scientific connections on R&D investments. Independent directors and insider ownership can mitigate the agency problem by additional monitoring and convergence of interests. Scientific collaboration promote technological development and increase R&D. The research reveals the difference of the effects in emerging and developed markets.In emerging markets theproportion of independent directors is positively connected with R&D investments. Such results can be explained by the fact that independent directors monitor risk-averse managers that underinvest in risky but perspective projects. Scientific connections significantly positively influence R&D investments. Empirical evidence also shows that companies with a higher proportion of independent directors have more collaborations with scientific institutions in emerging markets. Insider ownership also has no significant influence on R&D investments. Such a result can be explained by the fact that not all the insiders can influence the investment process. Moreover, beneficial owners can lack industry specific knowledge that allows them to monitor the process. In developed markets the situation is different. The proportion of independent directors is associated with lower R&D investment intensity. As R&D investments are extremely high in developed markets, we suppose that the overinvestment problem can exist. Thus, better corporate governance can decrease the investments closer to an optimal level. Scientific connections and insider ownership are not a significant factor. The research has wide policy implications. The results can be used by shareholders and government regulating institutions in creating optimal management structures.

Untangling the antecedents of code of ethics quality: does corporate governance matter?

Purpose– This study aims to investigate the antecedents of code of ethics’ quality with specific regard to the peculiarities of corporate governance, which include the role of the primary shareholders within the firm, the role and influence of independent directors on the board, the effect of board size on the strategic decision-making process and the influence of the chief executive officer’s (CEO) age and gender diversity.Design/methodology/approach– A sample of 248 Italian public companies publishing a code of ethics as of 2011 is used to test the hypotheses through Tobit regression models.Findings– A positive or negative impact is derived from the implementation of a high-quality code of ethics. Codes of ethics are strongly influenced by the ownership structure of the company given the critical role played by primary shareholders with larger stakes in influencing the quality of a code. Moreover, the lower the number of independent directors, the higher the firm’s propensity to invest in code of ethics’ quality. Similar results were found in relation to board size and CEO age, where smaller boards and younger CEOs are more inclined to implement higher-quality codes of ethics.Originality/value– Results support the argument that when linked to a sustainability strategic orientation focused on a high-quality code of ethics, corporate governance characteristics reveal influences that differ from those found in prior literature.

The effectiveness of boards of directors in two-tier board system: Evidence from Vietnamese-listed enterprises

This paper presents several theories to achieve a better understanding of corporate governance structures and their operations in a two-tier-board corporate governance structure. The author also analyses transitional economies using the case of Vietnam. The author investigates the influence of independent directors upon the probability of CEO turnover as well as the sensitivity of the link between performance and turnover. The findings show that non-executive directors are not always independent. At the same time, independent directors have a vital role to play in making decisions concerning CEO dismissal. These directors also reduce the effects of CEO ownership and CEO duality upon the probability of CEO turnover. In summation, the research found that performance and CEO age constitute key factors in CEO turnover, regardless of the corporation or board size.