Board and monitoring committee independence
Article
Article Title | Board and monitoring committee independence |
---|---|
ERA Journal ID | 19052 |
Article Category | Article |
Authors | Cotter, Julie (Author) and Silvester, Mark (Author) |
Journal Title | Abacus: a journal of accounting, finance and business studies |
Journal Citation | 39 (2), pp. 211-232 |
Number of Pages | 22 |
Year | 2003 |
Place of Publication | Australia |
ISSN | 0001-3072 |
1467-6281 | |
Digital Object Identifier (DOI) | https://doi.org/10.1111/1467-6281.00127 |
Web Address (URL) | https://onlinelibrary.wiley.com/doi/10.1111/1467-6281.00127 |
Abstract | This study focuses on the composition of boards of directors and their monitoring committees (audit and compensation) for large Australian companies. For firms whose boards use a committee structure, much of the monitoring responsibility of the board is expected to rest with the independent committee members. We document a positive association between the proportion of independent directors on the full board and its monitoring committees, and a greater proportion of independent directors on both audit and compensation committees than the full board. Our hypotheses tests involve an examination of the impact of other mechanisms used to control agency conflicts on full board and committee independence, and the association between this independence and firm value. We find that full board independence is associated with low management ownership and an absence of substantial shareholders. Audit committee independence is associated with reduced monitoring by debtholders when leverage is low. While we predict a positive relationship between board and monitoring committee independence and firm value, our results do not support this conjecture. |
Keywords | agency costs, audit, boards of directors, committees, compensation, corporate governance |
ANZSRC Field of Research 2020 | 520402. Decision making |
350799. Strategy, management and organisational behaviour not elsewhere classified | |
350102. Auditing and accountability | |
Public Notes | File reproduced in accordance with the copyright policy of the publisher/author. |
Byline Affiliations | Faculty of Business |
School of Accounting, Economics and Finance |
https://research.usq.edu.au/item/9y2zw/board-and-monitoring-committee-independence
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